Prepare evidence for the accountant's going-concern assessment

Ask the responsible accountant which framework, assessment period, information date, and reporting requirements apply. The horizon should follow those requirements rather than the length of an existing budget. Identify the entity or group being assessed and any restrictions that prevent one entity's resources from supporting another. Keep the accounting assessment distinct from management's ordinary planning cycle.

PCAOB AS 2415 addresses an auditor's consideration of going concern and management plans in covered audits. It does not make an auditor's procedure the company's universal management requirement. Use the accountant's applicable framework and the auditor's actual requests to define the evidence packet and responsibility for the conclusion.

Tie opening cash, debt, receivables, payables, and other material inputs to current approved records. Identify restricted or unavailable amounts separately. List overdue obligations and significant commitments not captured by a routine expense run rate. A model can show adequate headroom because it omitted a known payment or assumed funds were freely available.

Record the forecast version, preparation date, and input owners. Compare recent forecast results with actual outcomes to identify assumptions needing further support. Preserve significant differences and explain whether they reflect timing, changed conditions, or a flawed input. Give the accountant evidence for the model's reliability alongside its final closing cash figure.

Support financing and cost-reduction assumptions with evidence of their status. A signed facility, conditional commitment, ongoing negotiation, and hoped-for capital raise are different facts. Identify conditions, approvals, timing, and the party whose action is needed. Do not describe a proposal as secured financing because management expects it to succeed.

For a hypothetical forecast, opening cash of $300,000 plus projected receipts of $900,000 less payments of $1.4 million produces a $200,000 shortfall before additional funding. A proposed $250,000 investment would change the arithmetic, but its availability requires separate evidence. Present the shortfall and the proposal distinctly so the reviewer can assess the plan's feasibility and uncertainty.

Identify the assumptions with the greatest effect on the conclusion, such as collection timing, customer renewal, refinancing, or planned savings. Prepare supported alternative cases and explain their basis. Avoid an arbitrary percentage haircut that obscures the specific event creating uncertainty. The reviewer should see when a shortfall occurs and which action would need to work by then.

Document dependencies between actions. A planned asset sale may require consent, incur costs, or reduce operating capacity. A staffing reduction may take time and involve payments before savings arise. Ask the relevant operational or legal owner to confirm those facts. Represent management's preferred response with its practical conditions and projected financial benefit.

Give the accountant the reconciled model, evidence for management plans, sensitivity results, and unresolved limitations. Record the approved accounting and disclosure conclusion separately from the model itself. If an auditor is involved, respond through the agreed process and retain the versions supplied. A forecast is supporting evidence; it is not an assurance report.

Update significant facts through the relevant reporting endpoint, including financing outcomes and actual cash performance. Have the accountant reassess the effect of changed information on the conclusion and disclosures. Retain earlier versions so the record explains what management knew, what it planned, and what changed before the statements were authorized or issued under the applicable requirements.