When an Auditor Has Concluded There Is Substantial Doubt About

question 19

Multiple Choice

When an auditor has concluded there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time beyond the current financial statement date (9/30/X1) , the auditor's responsibility includes:

• A) Preparing prospective financial information to verify whether management's plans can be effectively implemented.
• B) Projecting conditions and events from one year prior to this year's date (9/30/X0) to 9/30/X1.
• C) Issuing an adverse or negative assurance opinion, depending upon materiality, due to the possible effects on the financial statements.
• D) Considering the adequacy of disclosure about the entity's possible inability to continue as a going concern.

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Definitions:

Aggression

Behavior aimed at causing harm or pain to others, which can be physical or verbal.

Sympathetic Arousal

Activation of the sympathetic nervous system, leading to physiological changes such as increased heart rate and blood pressure, often in response to stress or threat.

Fight or Flight

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

Inhibitory Neurotransmitters

Chemicals released from the neuron that prevent the next neuron from firing, thereby decreasing brain activity or stopping specific brain signals.