Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

Question

Quizplus · Accepted Answer

The best choices for identifying conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time are negative operating cash flows and inability to pay creditors on due dates. These are both indicators of financial difficulty and potential insolvency. Choice A (net asset positions) may also be relevant, but it is a less direct indicator. Choices D and E (change from cash-on-delivery to credit transactions with suppliers and loss of key management with replacement) may be relevant in certain situations, but are not as directly related to the company's ability to continue operating.

Which of the Following Audit Procedures Would the Auditor Use