Independent Auditors Must Consider Whether the Entity Has the Ability

question 68

Multiple Choice

Independent auditors must consider whether the entity has the ability to continue as a going concern. If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report, the auditors would normally

• A)disclaim an opinion.
• B)express an adverse opinion.
• C)qualify the opinion.
• D)express an unqualified opinion with an explanatory paragraph describing the going-concern uncertainty.

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Definitions:

Billion

A Billion is a numerical value equivalent to one thousand million (1,000,000,000) in the American short scale, commonly used in financial and demographic contexts.

Saving

The portion of income that is not spent on consumption or taxes, often set aside for future use or investment.

Disposable Income

Resources that become available for households for expenditure and saving activities following income tax deductions.

Induced Consumption

Consumption that increases when income increases and decreases when income decreases, reflecting consumers' responsive behavior to changes in income levels.