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:

Leptin

A hormone produced by fat cells that regulates energy balance by inhibiting hunger, which helps to regulate body weight.

Appetite

The natural desire or need to eat, driven by biological, psychological, and social factors.

Fat Cells

Cells known as adipocytes that store fat and play a key role in energy balance and metabolism.

Set Point

A concept used to describe the level at which various physiological measures tend to stabilize within an individual over time.