Auditing Standards Require Auditors to Evaluate Whether There Is Substantial

question 115

Multiple Choice

Auditing standards require auditors to evaluate whether there is substantial doubt about a client's ability to continue as a going concern. One of the most important audit procedures to perform to assess the going concern question is

• A) analytical procedures.
• B) confirmations from creditors.
• C) statistical sampling procedures.
• D) tests of internal controls.

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Definitions:

Outstanding Stock

The shares of a company that have been issued and are currently held by investors, including both public and private shareholders.

Effective Control

The practical authority to direct and manage operations, assets, or investments, often regardless of ownership percentages, ensuring the achievement of strategic objectives.

Widely Held Company

A corporation whose ownership is distributed over a large number of people with no single individual or group having a significant proportion.

Stockholders

Owners of shares in a company and thus, hold equity interest, enjoying benefits like dividends and voting rights.