Which of the Following Are Least Problematic for an Auditor

question 18

Multiple Choice

Which of the following are least problematic for an auditor about going concern issues of a potential audit client?

• A) Recent cash flow trends raise questions about the company's ability to pay its audit fees and other financial obligations.
• B) Recent financial instability heightens the company's risk for being sued.
• C) Escalating financial pressures heighten the company's risk of experiencing management fraud.
• D) Changing economic conditions create additional demand for the company's products.

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Definitions:

Robinson-Patman Act

A federal law in the United States that bans practices by producers that hinder competition, particularly discriminating in pricing.

Functional Discount

A price reduction offered to channel members who perform certain functions such as selling, storing, and record-keeping.

Wholesaler

A business or person that buys goods in large quantities from manufacturers and sells them in smaller amounts to retailers, typically at lower prices.

Clayton Act

A United States antitrust law, passed in 1914, aimed at promoting competition and preventing monopolies by prohibiting certain types of anti-competitive practices.