1887

n Professional Accountant - Financial distress - the responsibility of the professional accountant (SA) - : accounting technical

Volume 2016, Issue 27
  • ISSN : 1680-7537

Abstract

Section 128(f) of the Companies Act of 2008 defines financial distress of the business as being reasonably:


(i) Unlikely to meet its debt obligations when they are due within the immediately ensuing six months, and
(ii) Likely to become insolvent within the immediately ensuing six months. The Professional Accountant (SA) has a responsibility to assess the going concern (in terms of the accounting standards) as well as performing the liquidity and solvency test (in terms of the Companies Act) of the business when compiling the financial statements. The question that needs to be addressed is "What are the warnings signs that indicate that a business may be in or heading towards financial distress?"

Loading full text...

Full text loading...

Loading

Article metrics loading...

/content/account/2016/27/EJC188562
2016-01-01
2019-11-19

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error