After Considering Management's Plans,an Auditor Concludes That There Is Substantial

question 21

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.

---

Definitions:

Contextual Validity

The appropriateness of research or assessment methods and conclusions within the specific context they are applied.

Face Validity

The extent to which a test is subjectively viewed as covering the concept it purports to measure, often assessed through its appearance to non-experts.

Predictive Validity

The extent to which a score on a test or measurement accurately predicts future performance on a related task or behavior.

Concurrent Validity

The degree to which the results of a particular test or measurement correspond to those of a previously established measurement for the same construct.