The Auditors Have Determined That There Is Substantial Doubt About

question 11

Multiple Choice

The auditors have determined that there is substantial doubt about an entity's ability to continue as a going concern. When considering the appropriateness of management's disclosures and severity of the uncertainty, all of the following reports could be issued, except

• A)qualified opinion based on a material and pervasive uncertainty.
• B)unqualified opinion with an additional verbiage describing the uncertainty.
• C)adverse opinion based on inadequate disclosure of the uncertainty.
• D)disclaimer of opinion based on a material and pervasive uncertainty.

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Definitions:

Liabilities

Financial obligations or debts owed by a company to outside individuals or entities.

Assets

Resources owned by a company or individual that have economic value and can provide future benefits.

Expense Recognition Principle

An accounting principle that directs the recognition of expenses in the same period as the related revenues.

Actual Cost

The actual expense incurred to acquire an asset or the expense incurred to produce goods or services, as opposed to budgeted or estimated costs.