At each stage of the audit, what must the auditor obtain regarding the going concern assumption?

The correct answer highlights the need for auditors to gather adequate evidence during the audit process to assess the risks related to the going concern assumption. This assumption is critical for the financial statements, as it underpins the idea that the entity will continue its operations for the foreseeable future, typically assessed over a period of at least 12 months from the reporting date.

During the audit, the auditor must evaluate the appropriateness of management's use of the going concern assumption. To do this effectively, they need to collect sufficient and relevant evidence to understand any potential risks that could impact the entity's ability to continue operating. This involves assessing both the financial position of the entity and external factors that may influence its sustainability.

The auditor does this through a combination of inquiries, analytical procedures, and review of management's plans to mitigate risks. Adequate evidence supports not only risk assessment but also informs the auditor's evaluations and conclusions about whether the going concern assumption is valid.

This process is critical because if the going concern assumption is deemed inappropriate and the auditor does not gather adequate evidence, they might issue an incorrect audit opinion, leading stakeholders to make decisions based on flawed financial statements. Therefore, thorough risk assessment relating to the going concern assumption is foundational to performing a quality audit