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

Auditors have a responsibility to gather evidence regarding each risk factor that indicates doubt about the going concern assumption of the client. This is done to assess the impact of these factors on the client's financial statements and to determine whether the client's financial statements are fairly presented. Refusing to continue as the auditor, reporting to the tax authorities, or reducing the extent of further audit testing may not be appropriate actions at this stage.

If Auditors Identify Risk Factors That Indicate That the Going