Which of the following auditing 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) Inspecting title documents to verify whether any assets are pledged as collateral.
B) Confirming with third parties the details of arrangements to maintain financial support.
C) Reconciling the cash balance per books with the cut-off bank statement and the bank confirmation.
D) Comparing the entity's amortization and asset capitalization policies to other entities in the industry.

Question

Quizplus · Accepted Answer

Confirming with third parties the details of arrangements to maintain financial support would assist the auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern. This is because if a third party is providing financial support, it may indicate that the entity is having difficulty financing its operations on its own.

Which of the Following Auditing Procedures Most Likely Would Assist