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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