Last Updated on May 10, 2022 by Admin 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:
Explanation:
Notes This preview shows page 36 - 38 out of 186 pages. Question CPA-02743When an auditor concludes there is substantial doubt about a continuingaudit client's ability to continue as a going concern for a reasonableperiod of time, the auditor's responsibility is to:a.Consider the adequacy of disclosure about the client's possibleinability to continue as a going concern.b.Reissue the prior year's auditor's report and add an emphasis-of-matter paragraph that specifically refers to "substantial doubt" and"going concern."c.Report to the client's audit committee that management'saccounting estimates may need to be adjusted.d.Issue a qualified or adverse opinion, depending upon materiality,due to the possible effects on the financial statements.ExplanationChoice "a" is correct. When an auditor concludes there is substantialdoubt about an entity's ability to continue as a going concern for areasonable period of time, the auditor's responsibility is to consider theadequacy of disclosure about the entity's possible inability to continueas a going concern and include an emphasis-of-matter paragraph in theaudit report.Choice "d" is incorrect. The auditor would include an emphasis-of-matter paragraph following the unqualified opinion, or disclaim anopinion due to a material uncertainty. A qualified or adverse opinion isnot appropriate for doubt about an entity's ability to continue as a goingconcern.Choice "c" is incorrect. Management's accounting estimates areunrelated to going concern issues.Choice "b" is incorrect. Going concern issues are consideredprospectively. It is not appropriate to reissue a prior audit report if doubtarises about an entity's ability to continue in a future period. Becker Professional EducationRegistered to: Dominique DAntonioQuestion CPA-02746Reference in a group engagement partner's report to the fact that part ofthe audit was performed by another auditor most likely would be anindication of the: Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 186 pages? Upload your study docs or become a Course Hero member to access this document When an auditor concludes there is substantial doubt about a continuing audit client's ability?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: Consider the adequacy of disclosure about the client's possible inability to continue as a going concern.
What does it mean for an auditor to express substantial doubt about a client's ability to continue as a going concern?Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or ...
When an auditor believes there is substantial doubt?18. An auditor of financial statements believes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time.
When Should auditors generally assess a client's ability to continue as a going concern?one year beyond the date of the auditor's report. SAS No. 59 requires auditors to evaluate whether there is a substantial doubt about a client's ability to continue as a going concern.
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When an auditor concludes there is substantial doubt about a continuing audit clients ability?
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