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Question - You are currently engaged in the audit of Riah Ltd for the year ended 31st March 2021. It has been brought to your attention that after the year end, one of the company's three factories was closed following a strike by the employees over their claim for a 25% pay increase; the employees were dismissed and management do not intend to reopen the factory.
Required -
(a) List the factors that may indicate that a company is not a going concern and briefly describe why each of these factors indicates going concern problems.
(b) Describe the audit work that should be carried out in order to determine whether the closure has been correctly treated in the accounts of Riah Ltd for the year 31st March 2021.
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