If auditors determine there is substantial doubt about the entity continuing as a going concern, _______.
A)then the auditor should immediately notify the Securities and Exchange Commission (SEC)
B)the next step is to obtain information about management's plans to mitigate or minimize the adverse effects of the situation
C)the next step is to obtain information about the auditor's plans to mitigate or minimize the adverse effects of the situation.
D)the next step is to ensure the client is immediately billed for all services performed, to ensure payment

Question

Quizplus · Accepted Answer

If auditors determine there is substantial doubt about the entity continuing as a going concern, the next step is to obtain information about management's plans to mitigate or minimize the adverse effects of the situation. This is done to assess the entity's ability to continue operating as a going concern. The auditor will then evaluate and determine whether appropriate disclosures have been made in the financial statements. The other options (A, C, and D) are not the appropriate next steps in this situation.

If Auditors Determine There Is Substantial Doubt About the Entity