The Auditor Is Responsible for Evaluating the Likelihood of a Client

question 25

Multiple Choice

The auditor is responsible for evaluating the likelihood of a client not being a going concern for the next 12 months. What basis will the auditor use to assess this issue?

• A)Management integrity.
• B)Control environment.
• C)Absolute assurance.
• D)Substantial doubt.

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Definitions:

Kohlberg

Lawrence Kohlberg was an American psychologist best known for his theory of stages of moral development.

Business Transactions

Financial or commercial activities that involve the exchange of goods, services, or information between businesses or within a business.

Virtue

A trait or quality deemed to be morally good and thus is valued as a foundation of good moral being.

Moral Standards

The principles of right and wrong that are accepted by an individual or a social group, serving as a guide for ethical behavior and decision-making.