Research On Going Concern Opinion In Audit Report

As is known to all, as one of the "four accounting postulates", going concern is an important precondition of accounting. However, this deterministic assumption about development prospects of an accounting entity has been challenged by the fact that uncertainties of going concern exist widely in current society. The increase of risks in going concern also gives an edge to CPAs' auditing risks. People have become aware of the problem of going concern audit.This thesis centers on going concern opinion in audit report. Based on the relevant concepts of going concern, this thesis elaborates on the major problems when giving an audit opinion on going concern and introduces the provisions of going concern opinion in audit standards of China and other countries. Then given the current situation of going concern opinion delivered to China's public companies, it discusses the normative functions and suggestions for further perfection of "Independent Auditing Standards No. 17—Going Concern", which was revised in 2003. This thesis is divided into six parts.Starting from the relevant concepts of going concern, the first part of this thesis gives detailed descriptions to two concept pairs for the purpose to lay down theoretic bases for later researches. Under the guidance of these concepts, the elaborations on the importance of going concern auditing emerge as the times require. Going concern auditing seems to be absolutely necessary at the joint requirements of risks controls of CPA and financial statements users, as well as the qualities of accounting information.Since the going concern auditing is indispensable, the next question is how to give audit opinion on going concern. The second part of this thesis initially resolves the problems such as "self-fulfilling prophecy effects" brought about by audit responsibilities, audit evidence and audit opinion on going concern during the process of going concern auditing. It serves as a foundation for ways of going concern audit reports.The third part of this thesis introduces the rules on report choices for going concern in audit standards in different countries. In particular, China's independent audit standards, ISA and SAS are compared. The background andkey points of the revision are introduced in detail so as to lay down the standards foundation for later data analyses.In the context that the standards were issued and revised, what is the state of audit opinion issuance regarding the going concern to the public companies in China's security market? This is a key problem to be solved in Part 4. Taking the audit opinions on uncertainty of going concern issued to China's public companies from 1997 to 2004 as samples, the thesis uses descriptive statistics as the major methods to analyze the general situation of audit opinions issuance and their sources, so as to get a general view. Finally, it again comes to the general and summarizes the problems discovered during the analyses processes. During the data analyses processes, we should pay much attention to the division of sampling data according to the issuance time of standards exposure drafts when necessary and focus on the normative functions of revised standards. This chapter aims at providing bases for suggestions given to the perfection of audit standard.To discover the problems is to resolve them. Considering the problems existing in the going concern opinions, the fifth part of the thesis simply analyzes the reasons and attempts to further strengthen the normative function of audit standard based on the further perfection of this standard, so as to achieve the final goal of this research.The last part of this thesis summarizes the research outlines to reach a conclusion. In the meantime, due to various conditional limitations, there are inevitably some drawbacks in this research and they have influenced the research results to some extent. Though the thesis comes to the end, the focus and researches on this problem will not be stopped. Inspired by this thesis, in order to achieve more significant results and compensate for the drawbacks in this research, the direction for researches henceforth stands out clearly.