Mead, CPA, Had Substantial Doubt About Tech Co

question 542

Multiple Choice

Mead, CPA, had substantial doubt about Tech Co.'s ability to continue as a going concern when reporting on Tech's audited financial statements for the year ended June 30, 19X4. That doubt has been removed in 19X5. What is Mead's reporting responsibility if Tech is presenting its financial statements for the year ended June 30, 19X5, on a comparative basis with those of 19X4?

• A) The explanatory paragraph included in the 19X4 auditor's report should not be repeated.
• B) The explanatory paragraph included in the 19X4 auditor's report should be repeated in its entirety.
• C) A different explanatory paragraph describing Mead's reasons for the removal of doubt should be included.
• D) A different explanatory paragraph describing Tech's plans for financial recovery should be included.

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Definitions:

Negative Reinforcement

The process of strengthening a behavior by removing or avoiding a negative outcome or unpleasant stimulus as a result of the behavior.

Contingent Avoidance

A type of learning where a subject learns to perform a behavior to prevent the occurrence of an aversive stimulus.

Active Avoidance

A learning process in which an organism learns to perform a behavior to prevent or avoid an unpleasant stimulus.

Negative Reinforcement

The strengthening of a behavior by removing or avoiding a negative outcome or aversive stimulus when the behavior is performed.