As Part of the Auditor's Responsibilities with Respect to Evaluating

question 100

Multiple Choice

As part of the auditor's responsibilities with respect to evaluating whether an entity is a going concern,

• A)the auditor will attempt to obtain written assurances from management to this effect
• B)substantive testing and procedures will likely be extended over common stock and additional paid-in capital accounts
• C)the auditor will evaluate the entity's ability to generate sufficient debt to meet commitments regarding interest expenses, debt maturities, and debt covenants
• D)the auditor will evaluate the entity's ability to generate sufficient cash flow to meet commitments regarding interest expenses, debt maturities, and debt covenants

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Definitions:

Sense of Invincibility

This refers to a psychological state where an individual feels incapable of being defeated or experiencing harm.

Temperament

An individual’s characteristic manner of thinking, behaving, or reacting, often considered as innate rather than learned.

Difficult

Possessing or posing a challenge or requiring great effort or skill to accomplish, deal with, or understand.

Slow-To-Warm-Up

A temperament style where individuals are cautious and shy in new situations but gradually become more comfortable with repeated exposure.