3rd ICAI 2024

International Conference on Automotive Industry 2024

Mladá Boleslav, Czech Republic

5. Conclusion Based on the provided text, it can be concluded that accounting entities should monitor and analyze potential violations of the going concern assumption and the prudence principle within their company. It should also be a priority for these companies to permanently analyze their suppliers and customers. This is because the current situation in the automotive industry, especially in Europe, is not very favorable. As it is visible from the presented information in this paper, following the going concern assumption ensures that companies maintain financial stability and continue their operations in the foreseeable future. This is particularly important in an industry where long-term investments are common, such as automotive manufacturing. In terms of the prudence principle, the companies must be conservative in their financial reporting. In the automotive industry, where there are significant risks associated with factors like market fluctuations, technological advancements, and regulatory changes, complying with this principle helps in identifying and managing risks effectively. Following both principles enhances investor confidence because they rely on financial statements to assess the financial health and stability of companies operating in the automotive industry. Companies that follow the going concern assumption and the prudence principle provide more reliable and transparent financial information, which in turn increases investors’ and all other stakeholders’ trust and confidence. Disclosure statement: No potential conflict of interest was reported by the author.

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