When an auditor concludes there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time, the auditor's responsibility is to:
A)prepare prospective financial information to verify whether management's plans can be effectively implemented.
B)project future conditions and events for a period of time not to exceed one year following the date of the financial statements.
C)issue a qualified or adverse opinion, depending upon materiality, because of the possible effects on the financial statements.
D)consider the adequacy of disclosure about the entity's possible inability to continue as a going concern.

Question

Quizplus · Accepted Answer

When an auditor identifies substantial doubt regarding an entity's ability to continue as a going concern, the auditor's responsibility is to consider the adequacy of disclosure about the entity's possible inability to continue as a going concern in the financial statements. The auditor may issue an unqualified opinion with explanatory language or a qualified/adverse opinion depending on the materiality of the uncertainty and adequacy of disclosure. The auditor is not responsible for preparing prospective financial information or projecting future conditions and events beyond the financial statement date.

When an Auditor Concludes There Is Substantial Doubt About an Entity's