Third, I’d like them to actually make clear that audit is about ensuring companies are solvent when at present this fundamental requirement of UK law, implicit in the duty of an auditor to check that a company is able to pay a dividend without prejudicing its creditors, is ignored by the FRC.
I am under the impression – mistaken no doubt given that I appear to disagree with the Egregious Professor – that it is the duty of directors to ensure that a company is a going concern, is solvent.
I can’t really see any other way of this being done either. Audit is a once a year procedure, taken after year end. Companies go bust throughout the year….