The Ragun Cajun Bar and Grill,Inc.has been a popular restaurant in Beaumont,Texas.With no insurance,a recent hurricane has left the business with large losses due to a damaged building and lost business income.Which of the following concepts or principles of accounting will be of the greatest concern to Ragun Cajun's auditors?

Question

Quizplus · Accepted Answer

The going-concern concept assumes that a business will continue its operations and meet its financial obligations in the future. In Ragun Cajun's case, the hurricane damage and lost business income could raise doubt about the company's ability to continue as a going concern, which would have a significant impact on the company's financial statements and audit. Therefore, auditors would be most concerned with the going-concern concept.