[Anonymous]

An auditor concludes that is substantial doubt about an entitys ability to continue as a going concern. If the entitys disclosures are adequate, the audit report may include:

Disclaimer of opinion…. Except for qualified opinion.

a) yes / yes

b) No/ no

c) No/ yes

d) Yes /No.

The answer should be B) because the disclosures are adequate and therefore a unqualified with explanatory paragraph after opinion. Why does becker say d) ??

[Anonymous]

Some parts have to be memorized like the disclaimer issue here. I was originally understanding the concept before and that's what stumped me on this question. I try to think of the concept behind it…..there's a scope limitation and if it's severe enough, you can't do an audit. If you can't do an audit, you can't issue an opinion. So, you issue a disclaimer. Makes sense, doesn't it? Ah!! But in this question, that concept doesn't fit. This is one exception and it needs to be memorized. That's what I find ridiculous about AUD. Just when you thought it made sense, there's one little nitpicky exception and they love to test you on it.

[rknight21]

yeah cpaman…… i have come to find out also that in studying for auditing you need to know the rules and the exceptions… there are a few… eg… i seen a question that ask what procedure is done during the review of a company…. i narrowed it down to reading the board minutes and something else(cannot remember right now), anyways i thought the answer was definately board minutes because i have gotten that question correct with that answer before…..anyways the answer was indeed the other choice…. so need less to say i was stumped… i havent fully researched this yet but what i have came up with thus far is that with privately held company's you do not read the minutes but with publicly held companies then you do read the minutes….

its little things like these why simply memorizing an answer isnt good enough

[Anonymous]

Yeah. But you don't memorize the answer per se. You memorize why that's the answer and why exactly it's an exception. In your case, you just have to memorize the facts, which is…. with privately held company's you do not read the minutes but with publicly held companies then you do read the minutes.

[Anonymous]

Each section of CPA exam covers enormously detail, for me personally, it is nearly impossible to memorizing all the details and facts. Audit is all about logic and common sense. I managed to take Audit with just 10 days of preparation because i understood the reasons behind most of the rules. FYI, the reason why auditor have the option can issue an unqualified or disclaimer opinion on going concern is because if the company go bankrupt, the auditor do not want to be associate with the FS. If they believe the company will do alright after one year, they most of the time they will just issue an unqualified. Also, the reason why “non-issuer” do not require read the minutes nor required report on internal control is because their impact on public vs Issuers.

Good luck with your exam.

[Anonymous]

ChiTown- That makes sense. Thanks for the tip.

[Anonymous]

@CPAMan, @ChiTown, thanks!

I know this is several years later, but I just stumbled across this problem in my Wiley TB and I was scratching my head…Been thinking about it all day!

This is one of those moments that I'm thankful that we have this forum 🙂

[SullivanNJD]

I think it pretty much comes down to the auditor's discretion here. If the going concern is serious enough, the auditor may issue a disclaimer of opinion. Otherwise, the unmodified with an EOM is appropriate. Kind of a tricky question, definitely got it wrong when i first stumbled across is in becker.

FAR- 87
REG- 81
AUD- 88
BEC-

Who's Better Than Us? nobody

[Author]

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