Several years ago, the auditor’s report for Allegheny International, Inc., an airline company, contained the following excerpt: As described in Note 6 to the consolidatedfinancial statements, the Company has received waivers from lending institutions suspending the applicability of certain debt covenants while it arranges to keep its currentfinancing in place to the consummation of the merg¬ er described in Note 2. The Company’s ability to continue as a going concern is contin¬ gent upon its ability to maintain adequate financing and attain profitable operations. The consolidatedfinancial statements do not include any adjustments relating to the recover¬ ability or classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. REQUIRED:

a. Explain the meaning of this excerpt and why the auditors would include such a statement in the auditor’s report.

b. Briefly describe how such a report would affect the way in which an investor, creditor, or other interested party would analyze Allegheny’s financial statements.