After Considering Management's Plans, an Auditor Concludes That There Is

question 64

Multiple Choice

After considering management's plans, an auditor concludes that there is substantial doubt about a client's ability to continue as a going concern for a reasonable period of time. The auditor's responsibility includes

• A)disclaiming an opinion on the financial statements due to the indications of possible financial difficulties.
• B)indicating to the client's audit committee whether management's plans for dealing with the adverse effects of the financial difficulties can be effectively implemented.
• C)considering the adequacy of disclosure about the client's possible inability to continue as a going concern.
• D)issuing a qualified or adverse opinion, depending upon materiality, due to the possible effects on the financial statements.

Analyze activities that affect cash flows from operating activities.

Calculate net cash provided or used by investing and financing activities.

Identify and explain the importance of significant noncash investing and financing activities.

Comprehend the use of spreadsheets in preparing the Statement of Cash Flows.

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Definitions:

Anxiety Disorder

A psychiatric disorder marked by ongoing, intense concern, dread, or nervousness that disrupts regular life functions.

Illogical Fear

An irrational or disproportionate fear of objects, situations, or events with no logical basis.

A Specific Object Or Situation

A particular item or scenario that is identified or distinguished from others, often highlighted due to its unique or noteworthy characteristics.

Labyrinth

A complex structure of connected passages through which it is difficult to find one's way; often used metaphorically.