Which One of the Following Would the Auditor Consider to Be

question 13

Multiple Choice

Which one of the following would the auditor consider to be an indication of a potential going-concern problem?

• A)Loss of the controller to a competitor.
• B)Improper reporting of internal controls by management.
• C)Adverse key financial ratios.
• D)Large increase to sales in the month previous to year-end.

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Definitions:

Small Business

An independently owned and operated company that is limited in size and in revenue depending on the industry.

Illegal Contracts

Agreements that are not enforceable by law due to their involvement with illegal activities or being against public policy.

Modern Approach

The modern approach refers to contemporary methods or perspectives that are updated, innovative, or different from traditional ways.

Partially Enforceable

Refers to contracts or clauses within contracts that can be legally upheld in part, though some provisions may not be enforceable.