Which of the following audit procedures is most likely to assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity’s ability to continue as a going concern?

Accounting principle assumes that, a company will continue to exist long enough to carry out its objectives and commitments and will not liquidate in the foreseeable future.

Which of the following audit procedures is most likely to 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 . Confirmation of accounts receivable from principal customers.
B . Reconciliation of interest expense with debt outstanding.
C . Confirmation of bank balances.
D . Review of compliance with terms of debt agreements.

View Answer

Answer: D