Question

Required information Ch17 Going Concern Opinions (L017-1, LO17-3, L017-4) Going Concern Opinions Read the case and answer the questions that follow. Oftentimes, especially in challenging economic times, companies may not have positive financial results. The professional standards require that auditors evaluate whether there is substantial doubt about the company's ability to continue as a going concern for a reasonable period of time--a year from the balance sheet date. OOK rint CONCEPT REVIEW: Tremendous judgment is involved in this phase of the audit. It should be noted that while auditors are not required to perform procedures to test the going concern assumption, they must evaluate the assumption in relation to the results of the audit procedures performed relative to the other components of the audit. erences

Answer 1

Aos As per the data Dillon CPA is the auditer of Sunshine Industries. The net and current liabilites exceded current assets by 25%. consider sidering the above situations Dillon should perform specific and substanti Procedures which will be helpful to obtain appropriate evidence for the going concern in company and also to get the net loss. 2. To maintain the stability in the coming years the auditor should provide various adverse accounting reports which will show the status of company and new investments in projects etc.., . Dillon CPA could include an an emphasis of matter paragraph about specific reasons or items that the auditor should provide particular status and alw- ays mention the cash flow also negative cash flow and the liquidity ratios.