CAQ Commends FASB’s Issuance of Guidance to Improve Financial Reporting of Going Concern Entities
Wednesday, August 27, 2014
Washington, DC – Center for Audit Quality Executive Director Cindy Fornelli released the following statement on the Financial Accounting Standards Board’s (FASB) issuance of Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern:
“The CAQ commends FASB for its efforts in developing a standard that provides guidance regarding a preparer’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern, and, where required, to provide footnote disclosures about going concern uncertainties each reporting period.
“We believe the adopted ASU represents an improvement over the current going concern model and will provide users of financial statements with more clarity on the nature of conditions or events that may raise substantial doubt about the entity’s ability to continue as a going concern.
“The CAQ encourages accounting and auditing standard-setters to continue to work together to develop complementary standards which would further benefit financial statement users.”
About the CAQ
The Center for Audit Quality (CAQ) is an autonomous, nonpartisan public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, D.C., the CAQ is affiliated with the American Institute of CPAs. For more information, visit www.thecaq.org.