Challenges of the Knowledge Society (May 2021)
AUDITORS' AND MANAGERS' RESPONSIBILITIES REGARDING GOING CONCERN ASSUMPTION IN THE COVID -19 PANDEMIC CONTEXT
Abstract
The social protection measures imposed or recommended by the authorities during 2020, as a result of the COVID-19 pandemic, had a negative impact on the activity carried out by several economic entities in Romania, calling into question the presumption of going concern. Such situations require a closer analysis by auditors and members of the management of economic entities in terms of the risk of business continuity and the implications for the annual financial statements. The annual financial statements are the main source of information for a large category of users, including owners, on the assets, liabilities, financial position and financial performance of economic entities. If the management of an economic entity is aware of events that may lead to a significant restriction of the entity's activity or inability to continue its activity, it must be presented in the financial statements, as well as in the accompanying reports, the director's report and the of the independent auditor, as appropriate. The purpose of this paper is to present the responsibilities of financial auditors and those of the management of economic entities regarding the presumption of going concern, in the context of the pandemic COVID - 19. To achieve this goal there were analyzed studies, conducted so far by various authors, regarding the economic fields affected by the COVID -19 pandemic, the recommendations of the professional bodies active in the field of auditing the financial statements regarding the analysis of the business continuity risk and how they were applied by the auditors, the provisions of national accounting regulations regarding the going concern principle and the responsibilities of economic entities management to prepare the annual financial statements, in the current context.
