Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? O The auditors should request a meeting with the client's board of directors, and discuss the issue with them. O The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. O The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.

Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? O The auditors should request a meeting with the client's board of directors, and discuss the issue with them. O The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. O The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a
going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced.
What should the auditors do at this point?
The auditors should request a meeting with the client's board of directors, and discuss the issue with them.
The auditors should consider modifying the opinion for a material departure.
The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm.
The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary
amendment.

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