If auditors identify risk factors that indicate that the going concern assumption is in doubt,they will:
A)Refuse to continue as the auditor of their client.
B)Report the client to the Australian Taxation Office.
C)Reduce the extent of further audit testing that they undertake.
D)Undertake procedures to gather evidence regarding each risk factor.

Question

Quizplus · Accepted Answer

If auditors identify risk factors that indicate that the going concern assumption is in doubt, they will undertake procedures to gather evidence regarding each risk factor. This may include seeking additional information from management, conducting further audit testing, and reviewing relevant contracts and agreements. The auditor's objective is to determine whether there is significant doubt about the entity's ability to continue as a going concern and to provide appropriate disclosure in the audit report. Refusing to continue as the auditor or reporting the client to the Australian Taxation Office would not be the appropriate course of action unless there were other significant issues or legal requirements. Reducing the extent of further audit testing would not provide sufficient evidence to support the auditor's opinion.

If Auditors Identify Risk Factors That Indicate That the Going