Which of the following audit procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?
A.
Reading the minutes of meetings of the stockholders and the board of directors.
B.
Comparing the market value of property to amounts owed on the property.
C.
Reviewing lease agreements to determine whether leased assets should be capitalized.
D.
Inspecting title documents to verify whether any assets are pledged as collateral.
Suggested Answer:A🗳️
Choice "A" is correct. The auditor should examine any evidence that appears contrary to the basic principle of going concern. Reviewing the minutes from stockholder and board of director meetings is one procedure that is used in this regard. Choice "B" is incorrect. Comparison of the market value of property to amounts owed on the property determines its net value, but would not necessarily indicate a going concern issue. Choice "C" is incorrect. Reviewing lease agreements to determine whether leased assets should be capitalized is important in evaluating the financial statements, but it would not provide evidence of going concern issues. Choice "D" is incorrect. Inspecting title documents to verify whether any assets are pledged as collateral provides information regarding presentation and disclosure, but would not provide evidence of going concern issues.
Currently there are no comments in this discussion, be the first to comment!
This section is not available anymore. Please use the main Exam Page.AUD Exam Questions
Log in to ExamTopics
Sign in:
Community vote distribution
A (35%)
C (25%)
B (20%)
Other
Most Voted
A voting comment increases the vote count for the chosen answer by one.
Upvoting a comment with a selected answer will also increase the vote count towards that answer by one.
So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.
Comments