ASSESSMENT OF GOING CONTINUITY AND PROPER DISCLOSURE IN THE AUDIT OF FINANCIAL STATEMENTS

Abstract

The article considers compliance with the going concern principle as one of the key aspects of preparing financial statements, which is especially important for ensuring trust in the financial statements of the enterprise. In certain territories of Ukraine, conducting business has become risky or practically impossible, which directly affected the ability of enterprises to fulfill their obligations and fully continue their activities. In light of economic challenges and uncertainty, the correct application of this principle becomes particularly relevant. The objectives of management and the auditor in assessing the continuity of the enterprise's activities are highlighted. It is justified that the management personnel's performance of this assessment should take into account financial indicators, market conditions, the level of debt obligations and investments, and accordingly, the incorrect interpretation of this principle can lead to serious consequences for the enterprise and its investors. The management's assessment of the ability of the business entity to continue its activities on a going concern basis is the main part of the auditor's consideration of the management's use of the going concern assumption as a basis for accounting. The audit assessment of the continuity of the enterprise is aimed at improving the quality of financial reporting indicators, providing relevant users with reliable information about the ability of the enterprise to function in the near future, which helps to make informed management decisions. Accordingly, this requires not only consideration of standard financial indicators, but also an assessment of specific risks associated with the war. The results of the study determined that the impact of the war on the business of business entities and the assessment of management personnel regarding the continuity of operations should be taken into account in the regulatory framework and standards for continuity auditing. This includes the creation of more flexible approaches to auditing in conditions of uncertainty and crises, the development of tools for assessing risks, in particular in industries facing physical and financial threats (agriculture, energy, etc.).