An auditor concludes that there is substantial doubt about an entity’s ability t
ID: 2580780 • Letter: A
Question
An auditor concludes that there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. The entity’s financial statements adequately disclose its financial difficulties. Under these circumstances, the auditor’s report is required to include an emphasis-of-matter paragraph that specifically uses the phrase(s)
“Except for the effects of such adjustments”
“Possible discontinuance of the entity’s operations”
A.
Yes
No
B.
Yes
Yes
C.
No
No
D.
No
Yes
An auditor concludes that there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. The entity’s financial statements adequately disclose its financial difficulties. Under these circumstances, the auditor’s report is required to include an emphasis-of-matter paragraph that specifically uses the phrase(s)
“Except for the effects of such adjustments”
“Possible discontinuance of the entity’s operations”
A.
Yes
No
B.
Yes
Yes
C.
No
No
D.
No
Yes
Explanation / Answer
“Except for the effects of such adjustments” “Possible discontinuance of the entity’s operations” No No The auditor’s report is required to include an emphasis-of-matter paragraph that specifically uses the phrase "substantial doubt about the entity's ability to continue as a going concern"
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