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

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Definitions:

Import Quota

A specific limit or maximum quantity (or value) of a good permitted to be imported into a country during a given period.

U.S. Imports

Goods and services brought into the United States from other countries for sale.

Net Exports

The value of a country's total exports minus the value of its total imports.

Infant Industries

Industries in the early stages of development that may be protected from international competition to allow them to grow.