When an auditor concludes there is substantial doubt about a continuing audit cl

Question

When an auditor concludes there is substantial doubt about a continuing audit client’s ability to continue as a going concern for a reasonable period of time, the auditor’s responsibility is to A. Reissue the prior year’s auditor’s report and add a separate paragraph that specifically refers to “substantial doubt” and “going concern.” B. Express a qualified or adverse opinion, depending upon materiality, due to the possible effects on the financial statements. C. Consider the adequacy of disclosure about the client’s possible inability to continue as a going concern. D. Report to the client’s audit committee that management’s accounting estimates may need to be adjusted.

Explanation / Answer

When the auditor believes there is substantial doubt about the ability of the entity to continue as a going concern for a reasonable period of time, there is a responsibility to consider the adequacy of the client's disclosure of its inability to continue as a going concern Option C is correct

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