An auditor's going concern responsibility includes which of the following?

An auditor's going concern responsibility includes which of the following?

• A. Carry out audit procedures to evaluate going concern and report if used inappropriately
• B. Guarantee the entity's continuance
• C. Adjust the going concern basis to an optimistic view
• D. Ensure there are no going concern disclosures needed

Answer: (A)

Auditors must assess whether the entity can continue operating for a reasonable period and communicate any material uncertainties about that ability. This means they perform procedures to obtain evidence about going concern and, if management has used the going concern assumption inappropriately, they report that misapplication. They do not guarantee that the entity will continue, they do not adjust management’s going concern basis to be optimistic, and they do not ensure there will be no going concern disclosures needed. If doubt exists or disclosures are inadequate, the auditor’s role is to highlight that and ensure appropriate disclosure or reporting is provided.

Auditors must assess whether the entity can continue operating for a reasonable period and communicate any material uncertainties about that ability. This means they perform procedures to obtain evidence about going concern and, if management has used the going concern assumption inappropriately, they report that misapplication. They do not guarantee that the entity will continue, they do not adjust management’s going concern basis to be optimistic, and they do not ensure there will be no going concern disclosures needed. If doubt exists or disclosures are inadequate, the auditor’s role is to highlight that and ensure appropriate disclosure or reporting is provided.