29 An auditor concludes that there is substantial doubt abou

29. An auditor concludes that there is substantial doubt about a client\'s ability to continue as a going concern. If the client\'s financial statements adequately disclose its financial difficulties, which one of the following opinions should the auditor issue? (Hint: think carefully about the fact that the client\'s financial statements adequately disclose its financial difficulties). a. The auditor should issue a disclaimer opinion. b. The auditor should issue a qualified opinion. c. The auditor should issue an unqualified opinion. The auditor should issue a qualified opinion and add an explanatory paragraph detailing the isues angto the going concem judgment. d.

Solution

The Correct answer would be Option C - The auditor should issue an unqualified opinion

Adequate Disclosure of a Material Uncertainity is made in the Financial Statements

If adequate disclosure is made about the material uncertainity in the financial statements the auditor shall express a Unqualified Opinion and his report shall include a seprate section regarding the material uncertainity which would state that there exists events or conditions that may cast a significant doubt on the entity\'s ability to continue as a going concern and that auditor\'s opinion is not modified (unqualified) in respect of the matter.