The going-concern explanatory notes

Requirement 1
What is a going concern opinion and what does it mean? How is it different than an unqualified
audit opinion? (4 pts)
Requirement 2
What are the types of information that the auditor should consider when determining whether a
going concern opinion is appropriate? What audit procedures might an auditor perform to
determine the appropriateness of the going concern opinion? (6 pts)
Requirement 3
How might a going concern opinion become a “self-fulfilling” prophecy for Surfer Dude? (4 pts)
Requirement 4
What are the potential implications to the audit firm if they issue an unqualified opinion without
the going concern explanatory paragraph? (6 pts)
Requirement 5
How might Mark convince George that a going concern opinion is in the best interests of all
parties involved? Give some arguments that Mark might make. (6 pts)
Requirement 6
Obtain “Audit Committee Characteristics and Auditor Dismissals following ‘New’ Going-
Concern Reports” by Joseph Carcello and Terry Neal published in Accounting Review, January

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