Independent auditors must consider whether the entity has the ability to continue as a going concern.If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report,the auditors would normally
A)Disclaim an opinion.
B)Express an adverse opinion.
C)Qualify the opinion.
D)Express an unmodified opinion with an emphasis-of-matter paragraph describing the going-concern uncertainty.

Question

Quizplus · Accepted Answer

If there is a substantial doubt about an entity's ability to continue as a going concern but the auditors find no other basis for modification of the opinion, they would express an unmodified opinion with an emphasis-of-matter paragraph describing the uncertainty. This would draw readers' attention to the going concern issue while still providing a clean opinion on the entity's financial statements. Disclaiming or expressing an adverse opinion would be appropriate only if the going concern issue was so severe that it affected the overall fairness of the financial statements. Qualifying the opinion might also be appropriate in some cases, but an emphasis-of-matter paragraph would provide a clearer delineation of the going concern issue.

Independent Auditors Must Consider Whether the Entity Has the Ability