You are the auditor. You have determined that there is substantial doubt because, when you try to audit each of the mitigation activities above, you are unable to get comfort that they will actually manifest themselves.

You draft the following paragraph:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency and, while not currently in violation of debt covenants, will likely violate them in the next six months. These raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note X. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Which is the correct statement.

Group of answer choices

The above is an adverse paragraph

You, as auditor, concluded that management could successfully mitigate the indicators of substantial doubt.

The content of the above paragraph is generally prescribed by the SEC

The content of the above paragraph is generally prescribed by the PCAOB