CAF-8 · Chapter 10 · Question 9 of 10
What is the primary responsibility of the auditor regarding a company's 'Going Concern' status?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) To obtain sufficient appropriate audit evidence about the appropriateness of management's use of the going concern basis of accounting.
Explanation
ISA 570 requires the auditor to evaluate whether there is material uncertainty about the company's ability to continue as a going concern for at least 12 months.
More Substantive Procedures: Other Areas MCQs
- Q1When auditing 'Provisions' (e.g., for a pending legal case), the auditor's primary concern under IAS 37 is whether:
- Q2An auditor is reviewing the 'Contingent Liabilities' of a company. A major lawsuit against the company is deemed 'Possible' but not…
- Q3To obtain evidence about a pending legal claim against the client, the auditor should primarily:
- Q4In auditing share capital, which document provides the best evidence of the 'Authorized Share Capital' of a company incorporated in…
- Q5When auditing the 'Non-Current Liabilities' (long-term loans), the auditor should cross-check the interest expense in the income statement…
