When the Auditor Concludes That There Is Substantial Doubt About

question 58

Multiple Choice

When the auditor concludes that there is substantial doubt about the entity's ability to continue as a going concern and this has been adequately disclosed in the financial statements , the appropriate audit report would be:

• A) an unmodified opinion with no emphasis of matter section.
• B) a qualified opinion with an emphasis of matter section.
• C) an adverse opinion with an emphasis of matter section.
• D) an unmodified opinion with an emphasis of matter section.

Understand the contribution approach to income statements and its importance in managerial decision-making.

Assess the effect of activity level changes on total costs, net income, and cost per unit.

Estimate expected costs based on historical data using linear cost behavior assumptions.

Understand how to apply the high-low method to determine variable and fixed cost components.

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Definitions:

Ethical Misconduct

Behavior by an individual or organization that violates accepted moral standards or principles.

Philanthropic

Relating to the desire to promote the welfare of others, usually expressed especially by the generous donation of money to good causes.

Event Outcome Forecasts

Predictions about the results or consequences of events in the future.