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:

Income Distribution

Refers to the way in which total income is shared among the population or different groups within a society.

Income Mobility

The ability of individuals or households to move up or down the income distribution over a period of time.

Lorenz Curve

A graphical representation showing the distribution of income or wealth within a society, indicating inequality.