In which of the following circumstances would auditors most likely add an emphasis-of-matter paragraph to the standard (unmodified)report without modifying the opinion on the entity's financial statements?
A)The auditors are asked to report on the balance sheet,but not on the other basic financial statements.
B)There is substantial doubt about the entity's ability to continue as a going concern.
C)Management's estimates of the effects of future events on the entity's financial condition,results of operations,and cash flows are unreasonable.
D)Certain transactions cannot be tested because of management's records retention policy.

Question

Quizplus · Accepted Answer

An emphasis-of-matter paragraph would be added if the auditors have substantial doubt about the entity's ability to continue as a going concern. This paragraph would draw attention to the uncertainty related to the entity's ability to continue, but it would not modify the overall opinion on the financial statements. The other options do not relate to circumstances where an emphasis-of-matter paragraph would be required.

In Which of the Following Circumstances Would Auditors Most Likely