If conclusion is drawn that there may be a going concern problem, which of the following should the auditor do?
A) Withdraw from the engagement.
B) Issue a qualified or adverse opinion.
C) Identify and assess management's plan to overcome the problem.
D) Communicate this fact with management that is one level above the controller.

Question

Quizplus · Accepted Answer

If the auditor concludes that there may be a going concern problem, they should identify and assess management's plan to overcome the problem. This is because management has a responsibility to mitigate going concern problems, and if they have a credible plan to overcome the problem, it may alleviate the auditor's concerns. If management does not have a credible plan, however, the auditor may need to issue a qualified or adverse opinion, and in extreme cases, withdraw from the engagement. It is also important for the auditor to communicate this fact with management that is one level above the controller to ensure that appropriate action is taken.

If Conclusion Is Drawn That There May Be a Going