Going Concern Uncertainty of Vodafone Idea Ltd. | Ind AS 1 disclosure requirementsAnalysis of Relevant Provisions of Ind AS 1 and SA 570
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- Last Updated on 27 July, 2021
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While preparing the financial statements, an entity is always presumed to be continuing for the foreseeable future unless management intends to liquidate the business. The term foreseeable future is not defined under the Standard on Auditing (SA) 570. Going Concern has always been an underlying assumption in the preparation of financial statements as per Accounting Standards (ASs) 1 Disclosure of Accounting Policies. An auditor shall remain alert throughout the audit for audit evidence or events or conditions that may cast a significant doubt on the entity’s ability to continue as a going concern.
While evaluating the management’s plan, the auditor should identify those elements that are particularly significant to overcome the adverse effects of the conditions and events existing on the balance sheet date. If an auditor finds that the management’s plan may not overcome the adverse effects, then the auditor should modify his opinion in the report and even may qualify the use of going concern basis. But practically many auditors have been issuing unqualified audit reports on these matters over the years. Also, the fact that management plans to overcome the uncertainty are not appropriate is not being disclosed to bring clarity on the issue. One of such example is Vodafone Idea Ltd. where going concern uncertainty alert is neglected by the concerned auditors.
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