when an auditor concludes there is substantial doubt about a continuing audit client 602327
When an auditor concludes there is substantial doubt about a continuing audit client’s ability to continue as a going concern for a reasonable period of time, the auditor’s responsibility is to
- Issue a qualified or adverse opinion, depending upon materiality, due to the possible effects on the financial statements.
- Consider the adequacy of disclosure about the client’s possible inability to continue as a going concern.
- Report to the client’s audit committee that management’s accounting estimates may need to be adjusted.
- Reissue the prior year’s auditor’s report and add an explanatory paragraph that specifically refers to “substantial doubt” and “going concern.”