For the purpose of assessing the going-concern assumption, it is presumed that the auditor will consider whether the company will continue in existence for a “reasonable time” that does not exceed one year beyond the date of the financial statements.

Required:
Give reasons that auditors are not required considering the entity’s ability to continue as a going concern for a period longer than one year. In your opinion, is this one-year limitation reasonable? Explain and evaluate possible alternative approaches to support your opinion.