Which of the Following Audit Procedures Would the Auditor Use

question 50

Multiple Choice

Which of the following audit procedures would the auditor use to identify conditions that may indicate doubt that the company will continue as a going concern for a reasonable period of time?

• A)net asset positions
• B)positive operating cash flows
• C)ability to pay creditors on due dates
• D)change from credit to cash-on-delivery transactions with suppliers
• E)loss of key management without replacement
• F)both A and B
• G)both C and E
• H)Both D and E

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Definitions:

Fiduciary Responsibility

The obligation to act in the best interest of another party, such as a trustee acting for the benefit of the trust's beneficiaries.

Prudently

Acting with or showing care and thought for the future, often within the context of managing finances or making financial decisions.

Ex-Dividend Date

The cutoff date established by a company by which investors must be on the company's books to receive the next dividend payment.

Homemade Dividend Policy

A strategy in which investors create their own dividend policy by selling a portion of their portfolio of equities.