The Role of the Auditor in Stating the Extent to which Joint-Stock Companies are Able to Continue in Accordance with International Auditing Standard 570

Abstract

The research aims to verify the assumption of continuity by the external auditor using the (Springate) model and its impact on the external auditor’s report. The model was applied to nine joint stock companies listed on the Iraq Stock Exchange within three different sectors and for a time series that extended for (5) years from ( 2015-2019), the extent of the companies’ ability to continue was verified and it was found that there are companies capable of continuing and others unable to continue according to the approved model. On the other hand, the external auditor’s weak awareness of his responsibility towards the failure of the companies and his failure to give an opinion regarding the extent of the company’s ability to continue, as most of them hesitate. Including this to avoid it being a cause of accelerating financial failure, which leads to a decline in the company’s shares, the withdrawal of the owners’ funds, and the cessation of dealing with the company, as the opinion was positive for all the companies in the research sample despite the inappropriateness of imposing continuity for some companies. Based on the previous results, the researcher recommends the necessity of using models. The distinctiveness of measuring the continuity assumption in analytical procedures by the two external auditors during the audit stages to assist in planning, supervising, and determining the detailed procedures required to verify the continuity assumption.