Which of the following audit procedures would most likely assist an auditor in identifying conditions and events that may indicate there could be substantial doubt about an entity's ability to continue as a going concern?
A) review compliance with the terms of debt agreements
B) confirmation of accounts receivable from principal customers
C) reconciliation of interest expense with debt outstanding
D) confirmation of bank balances

Question

Quizplus · Accepted Answer

Reviewing compliance with debt agreements can help the auditor identify any potential default or breach of covenants which could impact the entity's ability to continue as a going concern. Confirmation of accounts receivable, reconciliation of interest expense, and confirmation of bank balances are all substantive audit procedures and may not necessarily assist in identifying going concern issues.

Which of the Following Audit Procedures Would Most Likely Assist