Allmark, the Client, Is a Small Manufacturing Company Currently in Need

question 63

Multiple Choice

Allmark, the client, is a small manufacturing company currently in need of cash in order to stay in business. Loan payments exceeding its cash on hand are due in 60 days and if Allmark defaults, its bank says it will foreclose on the assets used as collateral. Allmark's only recourse then would be to file bankruptcy. One solution is to seek outside financing from vendors eager to keep Allmark in business, although the availability of financing will not be known until the next fiscal year. The auditor should:

• A) audit the financial statements and disclose the possibility that Allmark may not be able to continue as a going concern.
• B) withhold the audit report until financing has been secured.
• C) disclaim an opinion on the financial statements.
• D) ignore the issue as it does not affect the current year under audit.

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Definitions:

Biopsychosocial Approach

A comprehensive model in healthcare and psychology, considering biological, psychological, and social factors in understanding and managing illnesses.

Intelligence

The capacity for learning, understanding, and applying knowledge and skills, often measured through cognitive tasks and problem-solving abilities.

Inherited

passed down from parents to offspring through genes, involving the transmission of genetic information.

Aristotle

An ancient Greek philosopher and scientist, whose works covered a wide range of subjects including physics, metaphysics, poetry, theater, music, logic, rhetoric, linguistics, politics, government, ethics, biology, and zoology.