If the auditor concludes that management’s use of the going concern basis of accounting is appropriate in the circumstances but a material uncertainty exists, the auditor shall: i) Determine  whether financial statements disclose clearly that there is a material uncertainty  ii) Determine whether the financial statements adequately disclose the principal conditions that may cast significant doubt on the entity’s ability to continue as a going concern. iii) Determine whether the financial statements adequately disclose management’s plans to deal with these events or conditions.   A.  i) and ii) B. i) and iii) C. Only i)

Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process
Section: Chapter Questions
Problem 40RQSC
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If the auditor concludes that management’s use of the going concern basis of accounting is appropriate in the circumstances but a material uncertainty exists, the auditor shall:

i) Determine  whether financial statements disclose clearly that there is a material uncertainty 

ii) Determine whether the financial statements adequately disclose the principal conditions that may cast significant doubt on the entity’s ability to continue as a going concern.

iii) Determine whether the financial statements adequately disclose management’s plans to deal with these events or conditions.

 

A.

 i) and ii)

B.

i) and iii)

C.

Only i)

D.

i) , ii) and iii)

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