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: Technology Startups
Technology startups operate in a fundamentally different going concern paradigm from established businesses: they are expected to burn cash. The going concern assessment is not about profitability but about whether the entity has sufficient runway to reach the next funding milestone, achieve profitability, or otherwise sustain operations. This makes cash runway analysis and funding pipeline assessment the central focus.
Key risk factors: Technology Startups
Key technology startup going concern indicators include: cash runway of less than 12 months without committed additional funding, failure to achieve key product or revenue milestones required for the next funding round, declining venture capital market conditions making fundraising uncertain, unsustainable customer acquisition costs (CAC) relative to customer lifetime value (LTV), key employee departures that could delay product development or undermine investor confidence, and absence of a credible path to profitability or further funding.
Cash runway calculation — this is the single most important assessment. Calculate months of cash remaining at the current burn rate, and also at an accelerated burn rate if growth investment is continuing.
Funding pipeline — assess whether the next funding round is committed, in term sheet stage, or purely speculative. Only committed funding (signed term sheets with closing conditions substantially met) should be treated as probable.
Burn rate trajectory — is the monthly cash burn increasing, stable, or decreasing? An increasing burn rate shortens runway faster than a linear projection suggests.
Revenue milestone achievement — many startups need to demonstrate traction (ARR targets, user growth, unit economics) to secure the next funding round. Assess whether these milestones are achievable.
Customer concentration — early-stage companies often depend on a small number of early adopters. Loss of one or two key customers can simultaneously destroy revenue and undermine the fundraising narrative.
Management's contingency plans — what can management actually cut to extend runway? Assess the credibility of cost reduction scenarios and whether they would impair the business beyond recovery.
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.