Indicators
Check all indicators that apply to the entity. Severity levels reflect their weight under ISA 570.A2. Expand any indicator to see the working paper guidance and likely review challenge.
ISA 570 Going Concern Reference Card — free PDF
All 19 ISA 570 indicators with severity ratings, review challenges, and auditor response guidance. One page for your planning folder. Plus one practical audit insight per week.
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Going Concern Assessment: Non-Profit
Non-profit entities face unique going concern dynamics because they do not generate commercial revenue — their sustainability depends on the continued willingness of donors, grant-makers, and funding bodies to provide resources. A loss of a major donor, the expiry of a multi-year grant without renewal, or a reputational event that undermines public trust can all precipitate a funding crisis. Unlike commercial entities, non-profits often cannot simply cut costs to survive because their costs are their mission.
Key risk factors: Non-Profit
Key non-profit going concern indicators include: dependency on a single donor or grant representing more than 25–30% of total income, expiry of multi-year grants without confirmed renewal, declining fundraising income over consecutive periods, restricted fund obligations that consume unrestricted cash (where restricted funds require co-funding), governance failures or reputational events that undermine donor confidence, and volunteer workforce decline affecting the entity's ability to deliver programmes.
Donor concentration — assess the top 5 income sources by value and what percentage of total income they represent. Loss of any single source representing more than 20% warrants going concern analysis.
Grant pipeline — for grant-dependent entities, map the expiry dates of all current grants and the status of renewal applications. A grant cliff (multiple grants expiring simultaneously) creates acute risk.
Unrestricted reserves — many non-profits report positive total funds but have minimal unrestricted reserves because the majority of funds are restricted. Assess free reserves as a percentage of annual operating costs.
Fundraising trends — declining donation income over 2–3 years may indicate donor fatigue, increased competition for funding, or reputational issues. Assess the trend and the entity's response.
Restricted fund obligations — entities with restricted funds may be required to spend those funds on specific programmes, even if the co-funding from unrestricted sources is not available. This creates a cash flow squeeze.
Governance and reputation — for non-profits, public trust is the foundation of income. Assess whether any governance issues, scandal, or adverse media coverage could affect future donations and grants.
ISA 570.9 — The auditor shall evaluate management's assessment of the entity's ability to continue as a going concern.
ISA 570.A2 — 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.