Area III: Performing Procedures — CPA Practice Question 29

How to approach this question

Going Concern Logic: 1. Doubt? Yes. 2. Plans alleviate? Yes -> Standard Report (with note disclosure). No -> Emphasis of Matter (Substantial Doubt).

Full Answer

B.Unmodified opinion with NO emphasis-of-matter paragraph regarding going concern.✓ Correct

Unmodified opinion with NO emphasis-of-matter paragraph regarding going concern.

Under AU-C 570, if substantial doubt is alleviated, the auditor does not include an emphasis-of-matter paragraph. (Note: Under PCAOB/Issuers, the rule is slightly different, but for nonissuers, if alleviated, no report mod).

Common mistakes

Thinking an emphasis paragraph is always required if doubt existed at any point.

How to approach this question

Full Answer

Common mistakes

Practice the full CPA AUD Practice Exam 4

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