Consider the following situations that might arise in the audit of the financial

Question

Consider the following situations that might arise in the audit of the financial statements of a nonpublic company. Indicate the type of opinion(s) that would be issued and describe any other modification to the standard audit report that would result. Unless indicated otherwise, assume that material amounts are involved. When more than one opinion might be issued, explain when each is appropriate.

a. In auditing a client, an auditor has determined that substantial doubt exists about an entity's ability to continue as a going concern.

Explanation / Answer

The auditor should evaluate whether there is substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time in the following manner:

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