How Might the 'going Concern' Principle Impact the Conduct of Audit Companies?

[Audity]

Hi guys, I have found my way here because it seems like this is a place full of intelligent people who know a lot about the subject of accounting and finance, and I would appreciate it if you could spare a few moments of your time to help me with an Uni essay. I'm a student at Lancaster University and have taken accounting and finance as one of my modules. I have 1,000 word essay to write by next Thursday (27/11) and I'm having having difficulty figuring out what are the main points that I should be discussing.

In particular I am unsure about this part: "Explain in what practical ways the going concern principle might impact on the conduct of the audit companies, particularly during recessionary times, and what types of companies you might expect to be most at risk."

I would appreciate any input as to what the key points I should hit on when discussing this in the essay.

Thank you,
-Matt


"Define briefly the going concern accounting principle and discuss concisely why it is important in financial accounting.

Explain in what practical ways the going concern principle might impact on the conduct of the audit companies, particularly during recessionary times, and what types of companies you might expect to be most at risk.

A good answer might contain briefly discuss real-life examples to illustrate its arguments."

[Sravanthi Y C]

Hi Audity,
I think this would be little helpful for your presentation.

"ISA 570 states that, under going concern assumption, a company is ordinarily viewed as continuing in business for the foreseeable future with neither intention nor the necessity of liquidation ceasing trading or seeking protection from creditors pursuant to laws and regulations".

The companies which expect risk during recessionary times are:
companies which manufacture luxury goods,
companies outsourcing
these industries are mainly effected with fluctuations in economy which is due to unforeseeable future.

[Audity]

I really appreciate you taking the time to help me out with this, that was really helpful.

Can you provide any insight as to how the going-concern principle may impact the conduct of audit companies, again, particularly during recessionary times?

Thank you