On what information does the auditor base a going concern evaluation?
A)On separate procedures.
B)On the management discussion and analysis (MD&A).
C)On information obtained from normal audit procedures performed to test management's assertions.
D)On the statement of cash flows for the current period.

Question

Quizplus · Accepted Answer

The auditor bases a going concern evaluation on information obtained from normal audit procedures performed to test management's assertions. These procedures provide evidence about the entity's ability to continue as a going concern for a reasonable period of time. The auditor may also consider any additional information that is available, such as the management discussion and analysis (MD&A) or the statement of cash flows, but these are not the primary sources of information used for the going concern evaluation.

On What Information Does the Auditor Base a Going Concern