An Auditor Has Substantial Doubt About the Entity's Ability to Continue

question 10

Multiple Choice

An auditor has substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time because of negative cash flows and working capital deficiencies. Under these circumstances, the auditor would be most concerned about the:

• A)control environment factors that affect the organizational structure.
• B)correlation of detection risk and inherent risk.
• C)effectiveness of the entity's internal control activities.
• D)possible effects on the entity's financial statements.

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Definitions:

Sex-linked Disorders

Genetic diseases that are passed through sex chromosomes, typically resulting in disorders more frequently in one sex than the other.

Phenotype

The set of observable characteristics of an individual resulting from the interaction of its genotype with the environment.

Karyotype

A complete picture of an individual’s chromosomes, used to look for abnormalities.

Allele Typing

The process of determining the variations of genes at specific loci in the DNA sequence, used in genetic research and forensics.