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.

---

Definitions:

Operational Activities

Actions and tasks associated with the day-to-day operations of a business, focusing on core business activities.