When the auditor concludes that there is substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, and this fact is adequately disclosed in the notes to the financial statements, the auditor's report should express:
A) a qualified opinion due to the uncertainty.
B) an unqualified opinion, with a fourth (explanatory) paragraph.
C) the standard unqualified opinion.
D) a disclaimer of opinion.
E) an adverse opinion.

Question

Quizplus · Accepted Answer

When there is substantial doubt about an entity's ability to continue as a going concern but the issue is adequately disclosed in the financial statement notes, the auditor typically issues an unqualified opinion but adds an explanatory paragraph to highlight the going concern uncertainty. This approach is meant to draw attention to the note disclosures without qualifying the opinion on the financial statements as a whole.

When the Auditor Concludes That There Is Substantial Doubt About