Question

The final step for the auditor to perform with respect to doubts about an entity's ability to remain a going concern is to communicate_______.

A. All relevant findings to the internal audit function.
B. All relevant findings to common stockholders.
C. With those charged with governance.
D. With all preferred stockholders.

Answer 1

An auditor should communicate with the board of directors regarding doubts about an entity's ability to remain a going concern, as the board is the main governing body in charge of corporate oversight.

Step-by-step explanation:

The final step for an auditor to perform with respect to doubts about an entity's ability to remain a going concern is to communicate with those charged with governance. This usually involves the board of directors of a company, who are elected by shareholders and serve as the primary overseers of corporate management and governance. The board, along with auditing firms and outside investors (especially large shareholders), are key components of corporate governance, as seen in the case of Lehman Brothers, where corporate governance failed to keep investors informed accurately about the firm's operations.