What must an auditor document when there is a concern regarding a client's going concern status?

Documenting the conditions or events that lead to the concern regarding a client's going concern status is essential for the auditor's assessment. This documentation serves to provide a rigorous basis for the auditor's judgment regarding the client's ability to continue operating for the foreseeable future, typically defined as at least twelve months beyond the date of the financial statements.

By outlining the specific conditions or events—such as negative cash flow, operating losses, default on debt obligations, or significant adverse changes in the marketplace—the auditor can establish a comprehensive understanding of the potential risks facing the entity. This information is critical not only for understanding the current status but also for evaluating the implications that these factors may have on the financial statements and whether appropriate disclosures related to going concern have been made.

While management's business plan, future revenue projections, and industry benchmarks are also relevant to assessing going concern, they are not the primary documentation that an auditor must focus on when there is an identified problem. The emphasis is on the auditor's need to clearly document the specific triggers or weaknesses that raise doubts about the entity’s ability to continue, providing the rationale for any further actions or assessments that may be required.