Which of the following are least problematic for an auditor about going concern issues of a potential audit client?
A) Recent cash flow trends raise questions about the company's ability to pay its audit fees and other financial obligations.
B) Recent financial instability heightens the company's risk for being sued.
C) Escalating financial pressures heighten the company's risk of experiencing management fraud.
D) Changing economic conditions create additional demand for the company's products.

Question

Quizplus · Accepted Answer

Changing economic conditions creating additional demand for the company's products is a positive factor and suggests that the company may be able to weather any financial difficulties. The other options suggest financial instability and potential fraudulent activity, which indicate a higher risk of going concern issues.

Which of the Following Are Least Problematic for an Auditor