When assessing going concern, which action indicates significant doubt?

• A. Requiring disclosure or adding emphasis of matter
• B. Issuing a standard unmodified opinion
• C. Restating prior year numbers
• D. Not disclosing any doubt

Answer: (A)

When there’s substantial doubt about a company’s ability to continue as a going concern, the way this is communicated in the financial statements and auditor’s report matters. The action that signals significant doubt is to require disclosure or add an emphasis-of-matter paragraph highlighting going-concern uncertainties. This flags to readers that there is meaningful doubt about the entity’s ability to continue, without implying the financial statements are necessarily unreliable on their own.

The other options don’t convey that doubt: issuing a standard unmodified opinion would suggest no significant going-concern issues; restating prior year numbers doesn’t address whether the entity can continue; and not disclosing any doubt would hide the risk from users.