[jomarie]

An auditor concludes that there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. If the entity’s disclosures concerning this matter are adequate, the audit report may include a(n)

Disclaimer of opinion Except for qualified opinion

A. Yes Yes

B. No No

C. No Yes

D. Yes No

I was thinking the answer would be B, cause I was thinking you would use an unqualified opinion with an explanatory paragraph. According to Wiley the answer is D???????? Can someone explain??? Thank you!!

Started sitting in May 2002, on and off. But since 2008 I've been nonstop and my scores are....
AUD - 39, 48, 56, 65, 68, 73, 76!!! (Finally passed in Oct 2011!!!) Becker, NINJA, & Wiley
REG - 75 (Lost Credit) 72, 68, 73, 75 (Passed again in Aug 2011) Becker, NINJA, & Wiley
FAR - 65, 68, 75 (Lost Credit) 68, 73, 73, 80 (Passed again in May 2012) Roger, NINJA, & Wiley
BEC - 65, 68, 71, 72, 72, 71, 76 (Lost Credit)- 70, 76!!!! I AM DONE!!! - Roger, NINJA, & Wiley
After 10 long years of studying, I AM DONE!!!! Finally a Licensed CPA in the State of New York!!

[UAcpa]

I don't have my audit book right in front of me, but I think it has something to do with the process of evaluating the Going Concern. The factors such as determining/becoming satisfied with management's plans to deal with Going Concern Issue and any steps that have been taken to mitigate the issue. The auditor may be satisfied with the disclosure, but I think there are other factors you have to evaluate before issuing the Modified Unqualified. Otherwise, the auditor is not precluded from issuing a Disclaimer even if the disclosures are adequate. Since they still have that option then B would be correct. Can someone confirm this?

[rknight21]

https://www.another71.com/cpa-exam-forum/topic/audit-q-omit-references-to-consistency

[Anonymous]

You can either Disclaim or Unqualify for going concern problems. Going concern is so pervasive that it would effect your scope of the audit on every level, IF the Going Concern is indeed bad enough.

An “except for” opinion isn't acceptable for Going Concern.

[Anonymous]

This was explained in another thread that rknight21 just linked above.

In a nutshell……when an entity has a going concern issue and it's adequately disclosed, you can either issue an Unqualified Opinion with an Explanatory paragraph or just issue a Disclaimer. However, if it is NOT adequately disclosed, that is considered a GAAP departure. In that case, you would issue either an Adverse or Qualified Opinion, depending on the severity (which is usually a judgment call).

[jomarie]

That's what I was thinking but I was a bit confused on the question cause it said that is was adequately disclosed so I was thinking modified unqualified. Thank you everyone!!

Started sitting in May 2002, on and off. But since 2008 I've been nonstop and my scores are....
AUD - 39, 48, 56, 65, 68, 73, 76!!! (Finally passed in Oct 2011!!!) Becker, NINJA, & Wiley
REG - 75 (Lost Credit) 72, 68, 73, 75 (Passed again in Aug 2011) Becker, NINJA, & Wiley
FAR - 65, 68, 75 (Lost Credit) 68, 73, 73, 80 (Passed again in May 2012) Roger, NINJA, & Wiley
BEC - 65, 68, 71, 72, 72, 71, 76 (Lost Credit)- 70, 76!!!! I AM DONE!!! - Roger, NINJA, & Wiley
After 10 long years of studying, I AM DONE!!!! Finally a Licensed CPA in the State of New York!!

[kb24]

If you're using Becker, there are some nice summary tables in the text as to what type of opinion to issue and when.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[Author]

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