However, the financial statement disclosures concerning these matters are adequate.

Correct Answer for the Question – However, the financial statement disclosures concerning these matters are adequate. is given below

This question-presents independent factual situations an auditor might encounter in conducting an audit. List A represents the types of opinions the auditor ordinarily would issue. Select as the best answer for this item, the action the auditor normally would take. The types of opinions in List A may be selected once, more than once, or not at all.Assume:– The auditor is independent.– The auditor previously expressed an unqualified opinion on the prior year’s financial statements.– Only single-year (not comparative) statements are presented for the current year.– The conditions for an unqualified opinion exist unless contradicted in the factual situations.– The conditions stated in the factual situations are material.– No report modifications are to be made except in response to the factual situation.Item to Be AnsweredDue to recurring operating losses and working capital deficiencies, an auditor has substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. However, the financial statement disclosures concerning these matters are adequate.List ATypes of OptionsChoice “B” is the correct opinion. In a going concern situation that is properly disclosed, an unqualified opinion should be issued.

An “except for” qualified opinion.

An unqualified opinion.

An adverse opinion.

A disclaimer of opinion.

Either an “except for” qualified opinion or an adverse opinion.

Either a disclaimer of opinion or an “except for” qualified opinion.

Either an adverse opinion or a disclaimer of opinion.

Correct Answer

The Correct Answer for this Question is

An unqualified opinion.

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