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.

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Definitions:

Socially Acceptable

Behaviors or practices that are widely accepted and approved by society or by a specific cultural group.

Transference

A psychological phenomenon where feelings, desires, and expectations from one relationship are unconsciously redirected to another relationship.

Biological Dysfunction

Abnormalities in physiological functioning that can lead to disease, disorder, or disability.

Situational Problems

These are challenges or issues that arise out of specific contexts or environments, requiring contextual understanding for resolution.