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.

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Definitions:

Respondent Behavior

Behavior that occurs as an automatic response to a certain stimulus.

Explorative Behavior

Actions taken to gather information about one's environment or to learn new things through direct experience.

Response Rate

The frequency at which a specific behavior is performed, often measured in experimental or observational studies to determine the effect of variables.

Fixed-Interval Reinforcement

A reinforcement schedule in which the initial response is reinforced only after a certain period of time has passed.