If auditors identify risk factors that indicate that the going concern assumption is in doubt, they will:
A) Undertake procedures to gather evidence regarding each risk factor.
B) Refuse to continue as the auditor of their client.
C) Report the client to the Canada Revenue Agency.
D) Reduce the extent of further audit testing that they undertake.

Question

Quizplus · Accepted Answer

If auditors identify risk factors that indicate that the going concern assumption is in doubt, they will undertake procedures to gather evidence regarding each risk factor to evaluate the potential impact on the financial statements. This is necessary to determine whether the going concern assumption is appropriate and to report any concerns to shareholders and other stakeholders. Refusing to continue as the auditor or reducing the extent of further audit testing without gathering evidence would not be appropriate actions in this scenario. Reporting the client to the Canada Revenue Agency also would not be relevant in this context.

If Auditors Identify Risk Factors That Indicate That the Going