oa Meditari : Research Journal of the School of Accounting Sciences - Are auditors law-abiding citizens?
|Article Title||Are auditors law-abiding citizens?|
|© Publisher:||University of Pretoria|
|Journal||Meditari : Research Journal of the School of Accounting Sciences|
|Publication Date||Jan 2004|
|Pages||41 - 65|
|Keyword(s)||Audit and legal paradigms clash, Audit stance, Going concern problem, Legal stance, South African Auditing Standard SAAS 570 'Going Concern' and South African legal framework|
The auditing and accounting profession must provide appropriate disclosure of the going concern status of an entity, especially when that status is threatened. Auditors have an obligation to consider the wider legal environment of an entity, including all relevant case law, when they perform any such audit. Despite this obligation, the auditing profession appears to violate important legal principles. The auditor's approach to the going concern status of an entity is contained in the South African Auditing Standard, SAAS 570 'Going Concern'. The South African legal framework's approach to this issue emerges from the Supreme Court case Philotex (Pty) Ltd v Snyman. This article explores the fundamental disagreement between the auditor's approach to the going concern problem and that adopted in terms of the wider South African legal framework.
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