If Auditors Identify Risk Factors That Indicate That the Going

question 17

Multiple Choice

If auditors identify risk factors that indicate that the going concern assumption is in doubt, they will:

• A) Undertake procedures to gather evidence regarding each risk factor.
• B) Refuse to continue as the auditor of their client.
• C) Report the client to the Canada Revenue Agency.
• D) Reduce the extent of further audit testing that they undertake.

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Definitions:

Wages Expense

An account representing the total cost of labor paid to employees, typically recorded over a specific accounting period.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.

Investment

The allocation of resources, often money, in the expectation of generating an income or profit.

Seller's Assets

Properties or financial resources owned by a seller, which can include inventory, buildings, equipment, or intellectual property.