Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity's ability to continue as a going concern?
A)Cash flows from operating activities are negative.
B)Research and development projects are postponed.
C)Significant related party transactions are pervasive.
D)Stock dividends replace annual cash dividends.

Question

Quizplus · Accepted Answer

Negative cash flows from operating activities indicate that the entity may not be generating enough cash to meet its obligations as they come due, which can result in a going concern issue.

Which of the Following Conditions or Events Most Likely Would