If the Auditor Concludes That There May Be a Going-Concern

question 77

Multiple Choice

If the auditor concludes that there may be a going-concern problem,which of the following is not typically evaluated to determine the reasonableness of management's plans to overcome this problem?

• A)Management's assumption about increasing prices or market share in relationship to current industry developments.
• B)Management's assumptions about cost savings related to a reduction in the work force should be recomputed and evaluated to determine any hidden costs.
• C)Management's past track record related to delaying unnecessary expenditures.
• D)Management's assumptions about selling off assets and their relationship to current market prices.

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Definitions:

Veins

Blood vessels that carry deoxygenated blood towards the heart from the body's tissues.

Tunica Media

The middle layer of the wall of blood vessels, made up of smooth muscle cells and elastic fibers.

Tunica Externa

The outermost layer of a blood vessel, composed of connective tissue, which provides structural support and flexibility.

One-Way Valves

Valves, particularly found in the veins and heart, that allow blood to flow in one direction and prevent backflow.