An Auditor Concludes That There Is Substantial Doubt About an Entity's

question 43

Multiple Choice

An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. If the entity's financial statements adequately disclose its financial difficulties, the auditor's report is required to include an explanatory/emphasis-of-matter paragraph that specifically uses the phrase(s) :

• A)"reasonable period of time, not to exceed one year" and "going concern."
• B)"reasonable period of time, not to exceed one year" but not "going concern."
• C)"going concern" but not "reasonable period of time, not to exceed one year."
• D)neither "going concern" nor "reasonable period of time, not to exceed one year."

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Definitions:

Non-verbals

Communication methods other than verbal language, including gestures, facial expressions, and body language.

Critical to the Overall Assessment

An essential component or factor that significantly influences the conclusions or outcomes of an evaluation or analysis.

Unstructured Interview

An interview in which the examiner does not have a preestablished list of items or questions to which the client can respond; instead, client responses to examiner inquiries establish the direction for follow-up questioning.

Underlying Issues

Fundamental problems or challenges that are not immediately visible or apparent.