Which of the Following Audit Procedures Would Most Likely Assist

question 83

Multiple Choice

Which of the following audit procedures would most likely assist an auditor in identifying conditions and events that may indicate there could be substantial doubt about an entity's ability to continue as a going concern?

• A) review compliance with the terms of debt agreements
• B) confirmation of accounts receivable from principal customers
• C) reconciliation of interest expense with debt outstanding
• D) confirmation of bank balances

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly the right to vote on corporate matters.

Personally Liable

The state of being legally responsible for something on a personal level, as opposed to through a corporate or collective entity.

Defective Corporation

A corporation whose incorporation process included an error or omission.

Corporate Status

A legal status that allows a company to operate as its own legal entity, separate from its owners.