When an auditor of a nonpublic company has concluded there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time beyond the date the financial statements will be released (1/26/X2),the auditor's responsibility includes:
A)Preparing prospective financial information to verify whether management's plans can be effectively implemented.
B)Projecting conditions and events from one year prior to this year's date (12/31/X0)to 12/31/X1.
C)Issuing an adverse or negative assurance opinion,depending upon materiality,due to the possible effects on the financial statements.
D)Considering the adequacy of disclosure about the entity's possible inability to continue as a going concern.

Question

Quizplus · Accepted Answer

When the auditor concludes that there is substantial doubt about the entity's ability to continue as a going concern, their responsibility includes evaluating the adequacy of disclosure about this matter in the financial statements. The auditor may consider issuing a modified opinion, but the specific type of modification (adverse or disclaimer) depends on the materiality of the matter and the auditor's judgment about the adequacy of disclosure. The auditor is not responsible for preparing prospective financial information or projecting conditions and events beyond the date of the financial statements.

When an Auditor of a Nonpublic Company Has Concluded There