Accounting · Going Concern Assessment
Which of the following would be the primary consideration by auditors when evaluating the appropriateness of management's assessment of an entity's status as a going concern?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The company's liquidity ratios in comparison with the strict industry average.
- 2The company's ability to continue operations and meet its obligations for the foreseeable future (at least 12 months).✓
- 3The company's historical profitability trends over the last decade.
- 4The company's current year's standalone net profit margins.
Correct answer
The company's ability to continue operations and meet its obligations for the foreseeable future (at least 12 months).
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