When an Auditor Concludes There Is Substantial Doubt About an Entity's

question 32

Multiple Choice

When an auditor concludes there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time, the auditor's responsibility is to

• A)Prepare prospective financial information to verify whether management's plans can be effectively implemented.
• B)Project future conditions and events for a period of time not to exceed one year following the date of the financial statements.
• C)Issue a qualified or adverse opinion, depending upon materiality, due to the possible effects on the financial statements.
• D)Consider the adequacy of disclosure about the entity's possible inability to continue as a going concern.

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Definitions:

Crop Losses

Reduction in the expected yield of agricultural products due to factors like pests, diseases, and extreme weather.

Pesticides

Chemicals used to kill pests, including insects, rodents, fungi, and unwanted plants (weeds), widely applied in agriculture to protect crops.

Cultivation Practices

The methods and techniques used in farming and agriculture to grow crops and raise livestock.

Inhospitable

Describes an environment that is extremely difficult for living organisms to survive in due to harsh conditions.