Case 12-4 Surfer Dude Duds: Consider the Going-Concern Assumption

PLEASE SEE ATTACHMENT FOR FULL CASE 12-4 Pgs. 385-387

1. What are Mark's options?
2. How might a going-concern explanatory paragraph become a "self-fulfilling prophecy" for Surfer Dude?
3. What potential implications arise for the accounting firm if they issue an unqualified report without the going-concern explanatroy paragraph?
4. Discuss the importance of full and accurate auditor reporting to the public, and describe possible consequences for both parties if the going-concern explanatory paragraph and footnote are excluded.  How might Mark convince George that a going-concern report is in the best interests of all parties involved?
5. How appropriate is it for an audit partner to have a friendly personal relationship with a client?
6. What factors should motivate Mark to be objective in his decision, despite his personal concern for his friend?
7. In your opinion, what shoud Mark do?

Attached file(s):

Case 12-4.pdf  View File