Audit Outcomes
Going Concern & Financial Sustainability
Entities flagged with material going-concern uncertainty, profiled against solvency and liquidity indicators.
Why going concern is the question behind every other number
Financial statements are prepared on the assumption that an entity will continue operating, so a material going-concern uncertainty undermines the meaning of every figure on the face of the statements. Under the PFMA, MFMA and the relevant GRAP and ISA going-concern requirements, accounting officers and auditors must assess whether solvency and liquidity can be maintained for the foreseeable future. AuditPro Core flags entities carrying going-concern uncertainty and profiles them against the solvency and liquidity indicators that drive the assessment.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Going-concern flags
64
▲ 13
Negative net position
41
Current ratio < 1
78
liquidity stress
Under intervention
22
Going-concern flags over time
Highest-risk entities
| Entity | Current ratio | Accumulated deficit |
|---|---|---|
| Maluti-a-Phofung LM | 0.31 | R 3.4 bn |
| Emfuleni LM | 0.42 | R 2.9 bn |
| SOE G | 0.55 | R 1.8 bn |
| Matjhabeng LM | 0.61 | R 1.2 bn |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
Solvency versus liquidity
Solvency asks whether total assets exceed total liabilities; liquidity asks whether cash and near-cash can meet obligations as they fall due. An entity can be solvent on paper yet fail because it cannot pay creditors on time.
The foreseeable-future test
Management must assess going concern over at least twelve months from the reporting date. Reliance on bailouts, overdrafts or delayed payments to creditors is a warning that the assumption is under strain.
Material uncertainty disclosure
Where significant doubt exists, it must be disclosed even if the going-concern basis is still used. Failure to disclose it is itself an audit finding.
How AuditPro Core Bridges the Gap
- Indicator reconciliation: solvency and liquidity ratios are computed from audited figures and reconciled to the disclosed assessment.
- Exception workflow: entities breaching coverage thresholds raise a flag routed for management and oversight review.
- Audit-ready export: the flagged cohort and ratios export into formats suited to AGSA and treasury engagement.
- Continuous monitoring: deteriorating indicators are tracked across periods rather than read once at year-end.
Key Takeaways
- Going-concern doubt undermines the validity of the entire set of financial statements.
- Liquidity, not just solvency, determines whether an entity can keep operating.
- Material uncertainty must be disclosed even when the going-concern basis is retained.
- Reliance on bailouts and creditor delays are early signs the assumption is failing.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.