Reviewing the Theoretical Contradiction of Going Concern (Auditing Standard No. 57) with Views of Independent Auditors
Journal Title: International Research Journal of Applied and Basic Sciences - Year 2012, Vol 3, Issue 5
Abstract
Given that the auditing standards in Iran are the translated versions of international auditing standards entirely, and their mismatch with the business context in our country because each country's laws cannot be fully compatible with business context of other countries, and also due to lack of auditing culture, lack of attention to the raison d'être of auditing, and other problems and challenges, there has been a gap between theatrical level and views of the independent auditors with regard to full implementation of auditing standards. Hence, finding the origins of and bridging the gaps between theoretical level and views of independent auditors, and providing solutions for implementation of auditing standards for the purpose of improving the quality of auditing and auditing organizations seem to be necessary. Among these, Auditing Standard No. 57 (going concern) can be pointed to which has been studied here. Generally, going concern means that the audited entity will continue to exist in the foreseeable future - usually for a period of one year after the end of the fiscal period, i.e. no intention or obligation for liquidation of the business entity or significant reduction in its amount of operations is assumed for preparation and presentation of financial statements. In this study, 6 major criteria affecting going concern were derived from Auditing Standard No. 57 including: unfavorable key financial ratios, greater total debts than total assets, failure to pay accounts payable in a timely manner, higher cash outflows than cash inflows from operating activities and major operating losses were considered as 6 hypotheses of contradiction of going concern (Auditing Standard No.57) with the views of independent auditors and were subsequently tested. Each hypothesis was tested using some questions from a questionnaire for Likert scale, and finally the questionnaires were collected and tested using chi-square test which is a nonparametric test, by means of SPSS software programs. All hypotheses regarding the relationship between the factors influencing the going concern were not rejected and thus were accepted in this study. And finally it can be concluded that there is no theoretical contradiction between Auditing Standard No. 57 (going concern) and the views of independent auditors.
Authors and Affiliations
Ali Rouhi| Assistant Professor, Islamic Azad University, Central Tehran Branch, Amir Reza Keighobadi| Lecturer Ph.D Scholarship, Islamic Azad University, Central Tehran Branch, Fatemeh Hatami Touski*| M.A. in Accounting, Islamic Azad University, Central Tehran Branch,fatemeh.hatami88@yahoo.com
Keywords
Related Articles
- EP ID EP5005
- DOI -
- Views 441
- Downloads 25
Relationship between inventory turnover with gross profit margin and sales shocks
The purpose of this study is evaluating the effect of inventory turnover on the variables of gross profit margin and sales shocks in listed companies in Tehran Stock Exchange. In other words, this study is performed in o...
The role of competitive strategies in increasing competition among companies based on the Porte r’s Model ) in Tractor making Company of Tabriz)
The position of a company among its competitors in industry is a determinant factor in the amount of profit, that is; a company which can provide a suitable position for itself canearn a great deal of profit from the rel...
A Study of educational effect of applying role – playing teaching method in History classroom
Present study has been done with the purpose of examining the educational effect of applying role – playing teaching method in History on second grade girl students of Asadabad guidance school in 2012-2013 academic year....
Numerical Simulation and Optimization of an Off- Road Vehicle Floorboard for Mine Blast Damage Reduction
This paper studies numerically the response of V-shaped hull subjected to mine blast load using finite element analysis package ABAQUS. The V-shaped plates are made from Domex700 steel folded along the centre to provide...
The Outcomes of Relationship Marketing Strategy in Banking Industry by Emphasizing on Word of Mouth
In recent years, banking industry has undergone intense competition along with many opportunities and threats. In such competition, those banks are successful which acquire higher share of the market with the lowest cost...