After Considering Management's Plans, If Auditors Determine There Is Substantial

question 81

Multiple Choice

After considering management's plans, if auditors determine there is substantial doubt about the entity's ability to continue as a going concern, _______.

• A)the auditor should consider withdrawing from the engagement
• B)the next steps are to consider the possible effects on the financial statements and on the auditor's report
• C)the next steps are to consider the possible effects on the financial statements and on the internal auditor's report
• D)the auditor should attempt to locate alternative lines of debt and equity capital for the client

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Critical

Expressing or involving an analysis of the merits and faults of a concept, narrative, or item, often involving detailed evaluation.

Mental Efficiency

The effectiveness with which an individual's brain processes information and performs cognitive tasks.

Moral Judgment

The process of determining the ethicality or morality of a certain action or decision based on personal, cultural, or societal standards.