When an Auditor Concludes There Is Substantial Doubt About an Entity's

question 10

Multiple Choice

When an auditor concludes there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time, the auditor's responsibility is to ________.

• A) prepare prospective financial information to verify whether management's plans can be effectively implemented
• B) project future conditions and events for a period of time not to exceed one year following the date of the financial statements
• C) issue a qualified or adverse opinion, depending upon materiality, due to the possible effects on the financial statements
• D) consider the adequacy of disclosure about the entity's possible inability to continue as a going concern

---

Definitions:

Formula

A mathematical rule or principle expressed in symbols and numbers used to calculate or solve problems.

Collect Like Terms

The process of simplifying an algebraic expression by combining terms that have the same variable raised to the same power.

Operation Indicated

The process of performing the mathematical operation suggested by a given situation or problem.

Final Value

The last or concluding worth of an investment or financial product, often after a set period or upon maturity.