Going concern

Question 1

If going concern basis is inappropriate, then the auditor should issue what opinion?

Answer 1

An adverse opinion.

Question 2

If the auditor identifies a number of events and conditions that imply going concern issues, the what should he/she do?

Answer 2

Perform additional procedures and reassess the components of audit risk.

Question 3

What are the auditor’s responsibilities regarding events and conditions beyond the period of management’s assessment?

Answer 3

To inquire whether the management knows any of the indicators if the significant doubt beyond the period of assessment.

Question 4

Close call

Answer 4

Events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern exist, but management’s plans are sufficient to mitigate the doubt

Question 5

Possible mitigating factors

Answer 5

Third party support