Insolvency
Following the financial position through time.
The financial context
Historical trading, cash movements and transaction records can help explain how a financial position developed. The relevant period, available evidence and precise purpose of the review determine the appropriate scope.
Questions that shape the review
How did the financial position develop?
Review trading records and cash movements over a defined period, with attention to the information available at the time.
Which transactions require explanation?
Connect the entries to supporting records and keep financial analysis within the agreed scope.
From information to an explanation
The work should connect the source material to the question being considered. Differences in definitions, periods or assumptions need to be made visible, together with the effect of any missing records.
The resulting explanation should distinguish what is documented, what depends on judgement and what remains uncertain. Its form and level of detail depend on the agreed purpose.
A question of suitability
The practice’s relevant experience, independence and the information available must be confirmed before any engagement. The purpose, scope and reporting requirements are agreed before analysis begins.
Discuss the financial question.
Start with the background, the relevant period and what you need to understand.
Discuss an enquiry