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Introduction 介绍
持续经营是指一个金融实体的功能，而不在未来可计算，这是至少12个月内清算的威胁。作为企业生存的前提下，持续经营密切关注有关企业的生存和发展。文章认为，审计人员可以判断一个公司是否保持持续经营的情况通过几个判断的因素，无论是和审计人员或管理人员有责任披露当一个实体不能继续在未来12个月。本文将首先讨论围绕持续经营显著的问题。在此之后，它会解释怎么回事关注的是决心。最后，将着眼于持续经营的重要性。Going concern refers that the functions of a financial entity are without threats of liquidation in the calculable future, which is at least within 12 months. As the premise of enterprise survival, going concern closely concerns about the survival and development of the enterprise. The article believes that auditors can judge whether a company keep going-concern situation through several judgment factors, and either auditors or managers have responsibilities to disclose it when an entity isn’t able to continue in the next 12 months. This article will firstly discuss the significant issues surrounding going concern. Following this, it will explain how going concern is determined. Finally, it will look at the importance of going concern.
Issues of going concern持续关注的问题
从菲利普·塞德勒的角度，去关注的是，以充分满足投资者投资其已经尽到了企业发展（奥斯卡奖，2010年）的预期收益。同时，持续经营是一个坚定的保持竞争力并创造附加价值足够的能力。而如何呢？From Philip Seidler’s perspective, going concern is to fully meet the expected return on investment of investors which have done to the enterprise development (Oscar, 2010). As well, going concern is a firm’s ability to remain competitive and to create enough value added. While how to make it?
First, enterprise resources are of importance. In the area of knowledge economy, we more emphasize on the intellectual capital resources, which can be divided into human focus, market focus, process focus, renewal and development focus. Enterprise’s competition in the final analysis is the talent competition, and the enterprise which has strong competitiveness of intellectual capital can strengthen enterprise’s ability to control resources and resource integration ability (Socol, A 2010). With the access of China into the WTO, the competition of entities has changed from the level of production and management to the level of talent. Faced with a more fierce international market, talented person seems of no advantage to a company, but such person is essential to a company.
Second, management structure makes a difference. A corporation has a plenty of departments, such as research and development department, purchasing department, production department and sales department. In daily lives, R&D departments create new products, and then, sales departments introduce and sell those products, when the products go wrong, customer service departments deal with customers’ calls and solve problems. Only if those departments work together, can the corporation realize leap-forward sustainable growth successfully (Gary, 1999).
Third, creative spirit should be emphasized, which can be seen from the pursuit of Iphone by people all around the world. Concluded from the development of Apple Inc, entity culture is the soul of an entity, because it can form a positive atmosphere, which makes the entity culture deeply rooted in the hearts of the people and becomes a driving force of the entity to motivate employees to work hard, stimulate the members work, and be full of enthusiasm (Alois, 2008)
How going concern is determined?怎么回事关注的是确定的？
The going concern assumption, a fundamental assumption for financial statements, is world-widely recognized by professionals in accounting. However, U.S GAAP has never incorporated it ceremonially (William, 2011, pp.26-28). The AICPA defines such assumption in its codification as the auditor’s consideration about whether an entity is able to keep working as a going concern.
An exposure draft issued by the FASB in 2008 would be implemented to financial statements, no matter the statements are interim or annual (Oscar, 2010). The assessment makes the prospective time span longer than 12 months from the end of reporting period. However, irrational long future time periods may lead to accounting problems. As a result, the FASB has budged little on it, which lead FASB to modifying the suggested time spans (Oscar, 2010, pp.79-84). As required by Auditing Standard ASA 570, an auditor is responsible to appraise whether the entity is unable to meet its obligations when they come due, such as without material disposal assets, externally forced amendments, restructuring of debt operations (O’Brien A, 2009, p38). Auditors may use procedures such as subsequent events reviews, inquiries of litigation from legal counsel to identify going concern.
Once the auditor doubts substantially that a company can’t proceed as a going concern any more for a prospective period, he should warn stakeholders like shareholders or debtors of the existence of such uncertainty using audit report. The auditor’s disclosure is ought to be made of the principal conditions with events that led him to doubt, plus the side-effects of such conditions. As well, the disclosure should mention mitigating factors, taking plans of management for example. If not, he should consider the need for disclosure.
In practical work, it can be concluded that auditors usually take 3 steps to determine whether an entity to be a going concern entity or not (PCAOB, 2015):
First, auditors seek for the problems of business that are able to make the entity discontinue for the next 12 months. Take the internal problems, external problems and financial difficulties for example.
Second, if problems exist, auditors are supposed to look at management’s plans to remedy the problems (PCAOB, 2015).
Third, if substantial uncertainties about the entity’s inability continue exist, then auditors should point it in an explanatory paragraph in the audit report.
While auditors are responsible to assess whether there is substantial doubt about an entity’s ability to continue as a going concern entity, managers have responsibilities to assert going-concern appropriately. Managers shouldn’t hide financial information on purpose leading auditors to making incorrect considerations (Socol, 2010, p291).
What must be stressed is that auditors assess management’s utilities of the going concern assumptions is from the date of auditing the report to the date of auditing the report in the following year, instead of the next financial year-end.
The importance of going concern持续经营的重要性
Going concern is the premise of enterprise survival, it closely concerns about the survival and development of the enterprise. What’s more, it also ensures the accuracy and completeness of accounting information compiled base. There is no doubt that every company should pay high attention to going concern. The following example shows the importance of going concern. In 2001 and 2002, 12 unimaginable bankruptcies took place in America, which gave a great recession to the national economy (Elizabeth, 2004, p40). Those bankruptcy filings ought to have been expected.
In accounting, at the moment of an entity being declared liquidated, all debts come due, tangible assets are wrote down to fair value, and intangible assets become worthless. Since going concern can also keep up earning profits, the value of a going concern is higher than its breakup value (IAASB, 2015, pp.547-561). Reversely, a going-concern opinion of an auditor lowers stakeholders’ confidence in the entity rapidly with the debt discharged by ratings agencies on the downgrade. Then such entities get no access to new capital and suffer increasing cost of original capital, which will no doubt lead the already troubled entities become worse and worse.
Another reason in that auditors do not mention a going-concern opinion is the lack of auditor independence. Manager decides whether to employ the auditors and how much money they can earn. A going-concern modification showing up, managers are likely to choose another auditor for their own interests, as is thought as ‘opinion shopping’ (IAASB, 2015).
Regrettably, auditors failed to bring the financial distress out in time. Prior to the bankruptcy filings, these 12 companies all received an inaccurate judgment on their financial statements. There were not any words describing the auditor’s consideration of the entities’ inability.
Conclusion总结
According to going concern assumption, it’s assumed that the entity will carry on in the foreseeable period of time and will not liquidate in the nearly future. The assumption assures the faith of investors or potential investors, and all the other stakeholders in the business. Thus financial statement is prepared on the basis of going concern assumption. And either auditors or managers have responsibilities to disclose it when an entity isn’t able to continue in the next 12 months.#p#分页标题#e#
Reference 文献
Alois, J.S 2008, Theory of Economic Development, Beijing Publishing House, Beijing.
Elizabeth, V.K 2004, ‘The going-concern assumption revisited: assessing a company’s future viability’, The CPA Journal, vol74, pp.40-45
Gary, A.L 1999, Enterprise Resources Planning and Beyond: Integrating Your Entire Organization, St Lucie Press
IAASB, 2015, International Standard on Auditing 570 Going Concern, pp.547-561
Oscar, H.J 2010, ‘The going-concern assumption’, The journal of corporate accounting &finance, vol.21, pp.79-84.
O’Brien, A 2009, ‘Growing concerns over going concerns’, Charter, vol.80, pp.38-39.
PCAOB, 2015, AU Section 341: The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, viewed 11 March 2015, http://pcaobus.org/Standards/Auditing/Pages/AU341.aspx
Socol, A 2010, ‘Significant doubt about the Going Concern Assumption in audit’, Annales Universitiatis Apulensisi: Series Oeconomica, vol 12, pp.291-293
William, H 2011, ‘Going-Concern Assumption: Its Journey into GAAP’, The CPA Journal, pp.26-28.
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