Chapters 17-19
Sustainability
Going Concern
Winding Up
Chapter 17
Sustainability & Going Concern
ESG Reporting, ISAs 570 & 720
01Sustainability (ESG)
- Environmental – climate, emissions, waste
- Social – workforce, community
- Governance – board, ethics
Key Point
ISSA 5000 governs sustainability assurance. Reasonable = opinion, Limited = conclusion.
02Going Concern (ISA 570)
Going Concern Concept
Assumption entity will continue operations for at least 12 months from reporting date.
Material Uncertainty
Significant doubt about entity's ability to continue as going concern. Must disclose in financial statements.
Auditor's Responsibilities:
- Evaluate management's assessment
- Consider events after reporting date
- Obtain sufficient appropriate evidence
- Report appropriately (qualified/adverse if GC is inadequate)
Chapter 19
Winding Up & Entity Types
Compulsory Winding Up & Voluntary Liquidations
01Types of Winding Up
- Compulsory – Court ordered (petition by creditor/member)
- Members' Voluntary (MVL) – Solvent company, declaration of solvency
- Creditors' Voluntary (CVL) – Insolvent company, no solvency declaration
02MVL vs CVL
MVL
Directors declare solvency (pay debts within 12 months). Liquidator appointed by members.
CVL
No solvency declaration possible. Liquidator appointed by creditors (or court if dispute).
Key Difference
In CVL, creditors' nominee prevails if there's a dispute. Liquidation committee possible (up to 5 creditors) – not available in MVL.