Going Concern Warning Case Study by noa

A review of the going concern warning and its implications in the Gmul investment company.
# 146638 | 909 words | 7 sources | MLA | 2009 | IL

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The paper explains the function of a going concern warning and reveals the signs and losses that caused the company's auditors to report the going concern warning in September 2008. The paper looks at the status and developments in the company in the aftermath of this warning.

Table of Contents:
Going Concern Assumption
Gmul's Going Concern Warning
Warning Signs
Gmul's Aftermath

From the Paper:

"If the company auditor has substantial doubt as to its ability to continue to function as a going concern he is required, according to manifesto 58 of the ICPA, to disclose this in the notes to the financial statements. In order to decide whether there is substantial doubt, the manifesto provides several examples of warning signs that can be discerned from the financial reports, such as: the total long/short-term liabilities are larger than the total long/short-term assets, delayed payments on liabilities that are due, negative cash flow, and so on. Since many times a going concern warning proves to be a self-fulfilling-prophecy, before the auditor decides to submit a going concern warning he must also take into account losses to the company due to the warning, and any signs that may show that the company is capable of recuperating from these losses in the near future."

Sample of Sources Used:

  • www.globes.co.il
  • www.themarker.com
  • www.investorwords.com
  • www.icpas.org.il
  • http://duns100.dundb.co.il

Cite this Case Study:

APA Format

Going Concern Warning (2011, January 09) Retrieved May 27, 2023, from https://www.academon.com/case-study/going-concern-warning-146638/

MLA Format

"Going Concern Warning" 09 January 2011. Web. 27 May. 2023. <https://www.academon.com/case-study/going-concern-warning-146638/>