The Sharman Panel of Inquiry, established at the invitation of the Financial Reporting Council to consider Going Concern and Liquidity Risks: Lessons for companies and auditors, publishes its final report and recommendations recently.
The Panel's key recommendations are that:-
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The primary purpose of the going concern assessment and reporting should be to reinforce responsible behaviour in the management of going concern risks; and
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The going concern considerations made by directors and reviewed by auditors should cover both solvency and of liquidity and that these should be considered over the cycle, taking an appropriately prudent view of future prospects.
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