An auditor is required to reach a conclusion in every audit regarding whether there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. If the auditor decides to mention the going concern problem in his or her report, he or she is precluded from:
A.
indicating the reason or reasons for the going concern problem.
Incorrect B.
issuing a qualified opinion on an accounting matter along with the going concern explanation paragraph.
C.
issuing an unmodified opinion on the financial statements.
D.
using conditional language in the auditor's conclusion about the entity's ability to continue as a going concern in a going concern emphasis-of-matter paragraph.
Explanation:
Some auditors issue reports in which the auditor's conclusions about the entity's ability to continue as a going concern is unclear because of the use of conditional terminology. Conditional language concerning its existence is precluded by AU-C 570, The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern.
If the disclosures about the entity’s ability to continue as a going concern are insufficient for the auditor, he should modify the opinion.
Can some explain why B is incorrect? I thought you can only issue an unmodified with EM paragraph or a disclaimer with going concern?
Thanks!
.