# NFRA flags gaps in going concern audits, asks auditors to challenge forecasts 2026-08-24T13:52:02+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet The National Financial Reporting Authority (NFRA) has raised concerns about how auditors assess going concern, particularly regarding cash flow projections, management assumptions, and financial support from promoters. Speaking at an NFRA webinar, chairperson Nitin Gupta said audit files often lack evidence of the work linking management's assessment to the auditor's final conclusion. He stressed that rigour must precede documentation and warned against applying audit methodology mechanically. Gupta said auditors must distinguish between a promoter's intention to provide financial support and their actual ability to do so. He noted that intent is frequently documented but ability is not examined with comparable vigour. The panel, featuring CA Guru Prasad and CA Aniruddh Sankaran, discussed the need to challenge management's assumptions, assess the reliability of underlying data, and examine the source and purpose of proposed funding. ## Indian Opinion Analysis NFRA's warning comes amid rising corporate defaults and promoter-led rescue plans that often fail. Under SA 570, an auditor must evaluate if a company can continue as a going concern for at least 12 months from the balance sheet date. The key gap NFRA flags is auditors accepting promoter letters and cash flow forecasts without verifying feasibility. This matters most for highly leveraged firms or those with newer business models, where standardised checklists miss entity-specific risks. Auditors must now demand bank statements, funding agreements, or audited financials of the promoter. The next regulatory step could be stricter enforcement or revised guidance on evidence requirements for going concern assessments. ## Coverage - cfo.economictimes.indiatimes.com Straightforward reporting of NFRA's concerns and webinar proceedings, with no editorial slant. This story was synthesised by AI from the source linked above. Tags: NFRA, Nitin Gupta, SA 570 Canonical: https://indianopinion.org/nfra-flags-gaps-in-going-concern-audits-asks-auditors-to-challenge-forecasts/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/nfra-flags-gaps-in-going-concern-audits-asks-auditors-to-challenge-forecasts/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes. How this brief was made: an AI model read the report linked above and wrote this summary and analysis, which were published automatically. Published briefs are sampled every hour by an automated quality check; the editor verifies its findings and approves corrections, and corrected briefs carry a dated correction line. We do no original reporting. Methodology: https://indianopinion.org/ai-use-policy/