ISA 570 (Revised 2024) — Going Concern & FX Risk Management

Executive summary

In April 2025, the IAASB published a substantively revised version of ISA 570, the auditing standard governing going concern. For financial years beginning on or after 15 December 2026, auditors will conduct going concern evaluations on every engagement, over a longer time horizon, with explicit scrutiny of the methods, assumptions and data used by management. For companies with material FX exposure, the practical effect is a step change in what auditors will want to see in the documentation of foreign-exchange risk.

The standard does not redefine going concern. It changes what auditors will demand to see — and how visibly they will communicate what they find. It is the most consequential revision of going concern auditing since the previous "Revised" version in 2015. It is the result of nearly a decade of accumulating pressure on auditors, regulators, and standard-setters to address a recurring pattern: companies issued unqualified going concern opinions shortly before failure.

Five substantive shifts matter in practice. First, going concern evaluation becomes mandatory in every audit, regardless of whether triggers exist. Second, the assessment horizon is extended — it now starts twelve months from the date the financial statements are approved, rather than from the balance sheet date. Because approval typically falls several months after year-end, the effective horizon reaches noticeably further into the future. Third, methods, assumptions and data face explicit scrutiny. The standard now requires the auditor to evaluate the appropriateness of methods used by management, the reasonableness of underlying assumptions, and the relevance and reliability of the data — pulling modelling choices, volatility and correlation assumptions, and market data sources directly into the audit perimeter. Fourth, professional scepticism is reinforced: management's plans to mitigate risks must be challenged, not accepted at face value. Fifth, auditor reporting becomes more transparent — going concern matters become more visible to boards, banks, investors and rating agencies.

For FX-exposed companies, the new standard's general requirements have a uniquely concrete impact — even though FX is never explicitly mentioned. Going concern depends on future cash flows. For businesses with substantial export revenues, foreign-currency procurement, or international financing, those cash flows are denominated in currencies whose values move. A meaningful going concern assessment must explain how FX risk is identified, quantified, and managed. The auditor, under the revised standard, must evaluate the rigour of that explanation.

Across mid-sized exporting companies in Europe, our observation is consistent: FX risk management is typically robust at the level of policy and execution — but underdeveloped at the level of documentation and methodological rigour. Volatility assumptions live in the head of the person who runs the model rather than in a documented memo. Correlations are used implicitly. Market data comes from a terminal feed without a recorded reference date. Adverse scenarios are limited to linear ±10% sensitivities. Each of these will be picked up explicitly by auditors from 2027.

The preparation window is concrete. H2 2026: diagnose the current state against five areas (exposure quantification, methodology, market data provenance, scenarios, hedge effectiveness). H1 2027: build the documented approach to volatility, correlation and scenario analysis, and establish the market data audit trail. H2 2027: integrate the documentation into the existing reporting cadence so the artifacts produced at year-end are the artifacts the auditor will want to see. Early 2028: the first audit under the revised standard becomes a verification of work done, not a discovery exercise under time pressure.

This whitepaper distils the over-hundred-page standard down to what matters in practice for treasury professionals. It addresses the question we have heard repeatedly in first conversations with CFOs in recent months: "What do I need to do differently — and from when?" The companies that act on this in 2026 will spend the 2027 audit window on substantive discussion. The companies that defer will spend it on retroactive documentation.