The Going Concern Assumption is predicted, measured and estimated after the completion of an audit. An auditor must assess if there is substantial uncertainty about an entity's ability to operate in the future. An auditor must determine if the entity may have possible financial issues in the future which could lead to bankruptcy/dissolution/termination. An auditor must evaluate if the business can operate in the near foreseeable future, normally one year after the balance sheet date.
To determine a going concern issue for the business, an auditor should review financial hardships such as defaults on loans, work stoppages, legal issues and analyze financial ratios (Debt/Equity, Acid-Test Ratio, etc.). The auditor should also consider "mitigating factors" which help a company stay afloat during tough financial time periods. All of this has to be taken into consideration before an auditor can state a possible going concern issue.