When an auditor 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 current financial statement date (9/30/X1), 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 (9/30/X0) to 9/30/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 there is substantial doubt about the entity's ability to continue as a going concern, the auditor's responsibility includes considering the adequacy of disclosure about the entity's possible inability to continue as a going concern. The auditor will need to evaluate the adequacy of the disclosure in the financial statements and provide additional disclosures if necessary, but the auditor is not responsible for preparing prospective financial information or projecting conditions and events. Additionally, an adverse or negative assurance opinion may be issued, depending on materiality, due to the possible effects on the financial statements.

When an Auditor Has Concluded There Is Substantial Doubt About