ACCA/CAT

Question Five

This 20-mark question was based on a pharmaceutical company，Medimade Co，which was experiencing going concern problems.

Part （a）for 2 marks required a definition of the going concern assumption. Most candidates were able to score at least one mark in relation to a reference to continuing to trade for the foreseeable future. In order to gain further credit there either needed to be an explanation of what the foreseeable future was，or a reference to the IAS 1 Presentation of Financial Statements requirement to prepare financial statements on a going concern basis.

Part （b）for 8 marks required an identification of going concern indicators for Medimade Co and a description of why these indicators could impact upon going concern.

Generally candidates scored well in the identification of going concern indicators for Medimade Co，a small minority of candidates did not relate their answers to the scenario and instead produced a standard list of indicators.

The requirement to then describe the impact upon going concern was more problematic for candidates，as many answers just stated “this will lead to going concern problems” as opposed to explaining why there would be an impact on going concern. Therefore although the marking allocation was to give . mark for an indicator and up to 1 mark for the explanation of the impact， few candidates scored 1. marks for their points. However，due to the considerable number of going concern issues in the scenario，many candidates did score well in this question.

Part （c）for 6 marks required audit procedures to assess if Medimade Co was a going concern. This question was satisfactorily answered by most candidates.

Many had a reasonable attempt at this question and generated some satisfactory tests such as obtaining a management representation on going concern and reviewing cash flow forecasts，however there were also a number of unsatisfactory tests provided.

（责任编辑：中大编辑）

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