If an Auditor Has Serious Going Concern Issues Regarding the Client

question 53

Multiple Choice

If an auditor has serious going concern issues regarding the client, but the financial statements are correctly stated, then the auditor should:

• A) issue an adverse opinion.
• B) issue a disclaimer of opinion.
• C) issue an unqualified opinion with appropriate explanatory language.
• D) perform analytical procedures of the adjusted financial statements.

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Definitions:

Receivables

Money owed to a company by its customers or clients for goods or services that have been delivered or used, but not yet paid for.

Maker

Maker often refers to an individual or entity responsible for creating or manufacturing something, often within contexts like craftsmanship, invention, or production.

Promising to Pay

A commitment or agreement by an individual or entity to fulfill a financial obligation at a future date.

Interest

The cost of borrowing money or the return that is earned on invested funds, typically expressed as an annual percentage rate.