alleryStart learning →Why do auditors avoid flagging going concern doubts?
ASelf-fulfilling prophecy risk
BLaw bans such paragraphs
CIt cuts the fee to zero
DIt needs member approval
Answer & Solution
Correct answer: A. Self-fulfilling prophecy risk
A negative disclosure can cut the auditee's access to capital and may cause its failure.
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Related questions
Does a going concern emphasis of matter necessarily mean imminent insolvency?Under UK and Irish standards, an entity is a going concern unless management does what?Which item would an auditor weigh when judging doubt about going concern?For how long must an auditor test going concern ability after the audited statement date?The going concern principle allows a company to defer which items to future periods?How does the value of a going concern compare with its breakup value?The going concern basis is presumed unless what is imminent?When liquidation of an entity becomes imminent, which basis is used for its statements?