To start, on the topic of management’s implicit assertion is they described in their article that of long-term assets and liabilities requires validity for the going concern assumption to effectively work as without this the financial statements based on accrual-basis accounting is misleading. Second, with going along with the topic on management’s explicit disclosure is talked about as they present three scenarios in which management is required to validate their going concern with their financial statements under ASC 205-40 to what management must do when fallen under one of these three scenarios. Third, the auditor’s examination of the going concern assumption is that auditors also have a responsibility in validating management’s going concern as if there was “substantial doubt” that existed or not to if there was to get information on management’s plans to further determine if one still existed as these were under AU 341, SAS, or AU-C 570 that related to going concern. Fourth, that Bor-Yi and Sean Chen talked about was on auditor’s errors of judgment that related to going concern as the risks they have when looking over the going concern assumption as having type 1 and type 2 errors. In addition, with this they briefly described the two as “type 1 error occurs when an auditor concludes that the going
To start, on the topic of management’s implicit assertion is they described in their article that of long-term assets and liabilities requires validity for the going concern assumption to effectively work as without this the financial statements based on accrual-basis accounting is misleading. Second, with going along with the topic on management’s explicit disclosure is talked about as they present three scenarios in which management is required to validate their going concern with their financial statements under ASC 205-40 to what management must do when fallen under one of these three scenarios. Third, the auditor’s examination of the going concern assumption is that auditors also have a responsibility in validating management’s going concern as if there was “substantial doubt” that existed or not to if there was to get information on management’s plans to further determine if one still existed as these were under AU 341, SAS, or AU-C 570 that related to going concern. Fourth, that Bor-Yi and Sean Chen talked about was on auditor’s errors of judgment that related to going concern as the risks they have when looking over the going concern assumption as having type 1 and type 2 errors. In addition, with this they briefly described the two as “type 1 error occurs when an auditor concludes that the going