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)
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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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