Going Concern Checklist for Agriculture
Tailored going concern assessment for agricultural entities. Covers industry-specific indicators including harvest risk, commodity price exposure, subsidy dependency, and biological asset impairment.
Engagement context
Set the entity details for your working paper. The assessment period is calculated per ISA 570.3.
Indicators
Check all indicators that apply to the entity. 21 indicators from ISA 570.A2/A7 including ISA 570 (Revised 2024) additions. Expand any indicator to see working paper guidance and the likely review challenge.
ISA 570 Going Concern Reference Card: free PDF
One page for your planning folder: the indicator severity matrix, ISA 570.3 assessment period checklist, draft MURGC paragraph, ISA 570.16–.19 evidence requirements, and a summary of the key ISA 570 (Revised 2024) changes effective December 2026. Plus one practical audit insight per week.
No spam. We're auditors, not marketers.
How the score works
Each indicator is weighted by severity: High = 3 points, Medium = 2 points, Low = 1 point.
Assessment levels are determined by two criteria (whichever is met first):
- Substantial doubt: ≥2 high-severity indicators OR weighted score ≥8
- Significant concern: ≥1 high-severity indicator OR weighted score ≥4
- Limited concern: Weighted score ≥1
- No indicators: Score = 0
The 21 indicators are sourced from ISA 570.A2 (current) and ISA 570 (Revised 2024) A7, covering financial, operating, and other categories.
This scoring is a starting point for professional judgment. The auditor must consider entity-specific circumstances, industry context, and the collective effect of indicators when forming a conclusion.
ISA 570.9: The auditor shall evaluate management's assessment of the entity's ability to continue as a going concern.
ISA 570.A2/A7: Events or conditions that may cast significant doubt include financial, operating, and other indicators.
ISA 570.16: If events or conditions have been identified, the auditor shall obtain sufficient appropriate audit evidence about whether a material uncertainty exists.
Going concern assessment: Agriculture
Agricultural entities are exposed to a unique combination of biological risk (crop failure, disease, adverse weather), market risk (commodity price volatility), and policy risk (subsidy changes, trade restrictions). Many agricultural businesses operate with thin margins and high seasonal cash flow concentration — the entire year's income may depend on a single harvest. This makes the going concern assessment particularly sensitive to timing and forward-looking assumptions.
Key risk factors: Agriculture
Key agricultural going concern indicators include: consecutive harvest failures or significant yield reductions, commodity prices sustained below the entity's cost of production, changes in government subsidies (such as CAP reform) that reduce guaranteed income, disease outbreaks requiring herd culling or crop destruction, inability to service agricultural debt (particularly seasonal operating loans), and declining land values that erode collateral for secured lending.
Harvest and yield risk — assess the entity's historical yield variability and whether crop insurance or government compensation schemes provide adequate protection against a catastrophic harvest failure.
Commodity price exposure — model the entity's cash flows at current market prices, not historical averages. Assess whether the entity uses forward contracts or hedging to protect against price declines.
Subsidy dependency — calculate what percentage of the entity's income comes from government subsidies. If subsidies are under review or reform, model the impact of reduction or elimination.
Seasonal lending — agricultural entities typically draw on seasonal credit facilities to fund planting and production, repaid from harvest proceeds. Assess whether lenders have committed to renew these facilities.
Biological asset risk — disease outbreaks, pest infestations, or adverse weather can destroy biological assets. Assess the entity's risk mitigation (insurance, diversification, geographic spread).
Land value trends — many agricultural entities use land as collateral. Declining land values can trigger LTV breaches and restrict access to additional borrowing for working capital.