If Conclusion Is Drawn That There May Be a Going

question 162

Multiple Choice

If conclusion is drawn that there may be a going concern problem, which of the following should the auditor do?

• A) Withdraw from the engagement.
• B) Issue a qualified or adverse opinion.
• C) Identify and assess management's plan to overcome the problem.
• D) Communicate this fact with management that is one level above the controller.

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Definitions:

Direct Labor Hours

The amount of time spent by workers directly involved in manufacturing a product.

Direct Materials

Raw materials that can be directly linked to the production of specific goods or services in a manufacturing process.

Fluid Ounces

A unit of volume used primarily in the United States to measure liquids, equivalent to approximately 29.57 ml.

Production Process

The series of steps involved in transforming raw materials into finished goods or services.