If the auditor concludes that there may be a going-concern problem,which of the following is not typically evaluated to determine the reasonableness of management's plans to overcome this problem?
A)Management's assumption about increasing prices or market share in relationship to current industry developments.
B)Management's assumptions about cost savings related to a reduction in the work force should be recomputed and evaluated to determine any hidden costs.
C)Management's past track record related to delaying unnecessary expenditures.
D)Management's assumptions about selling off assets and their relationship to current market prices.

Question

Quizplus · Accepted Answer

Management's past track record related to delaying unnecessary expenditures may not be relevant or significant in evaluating the reasonableness of management's plans to overcome a going-concern problem. The other options are typically evaluated by the auditor to determine the reasonableness of management's plans.

If the Auditor Concludes That There May Be a Going-Concern