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09FR-007 How concerned should directors be about going concern?

09FR-007 Director responsibilities around going concern

ASIC warnings about targeting director responsibilities around insolvent trading means directors should be actively considering their responsibilities.

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This Flash Report covers questions that directors should be asking themselves, including:

  • insolvency under the Corporations Act – the consequences for directors, the period of focus, and recent legal cases
  • insolvency versus going concern – the difference between assessing solvency and assessing going concern, and factors that should be considered in the assessment
  • supporting solvency and going concern – responsibilities of directors
  • evidence to be considered
  • mitigating factors when there is uncertainty
  • impact on reporting – overviewing the impact on the financial report and auditor’s report, and the interaction with other disclosure requirements.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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