When an auditor believes there is substantial doubt about the ability of an entity

Answer : C

Explanation:
Choice "C" is correct. Leasing rather than purchasing operating facilities results in reduced (or at least delayed) expenditures, which is a mitigating factor in a going concern situation.
Choice "A" is incorrect. Mitigating factors in a going concern situation include plans to dispose of assets, plans to borrow money or restructure debt, plans to reduce or delay expenditures, or plans to increase ownership equity. Repurchasing stock is an outflow of cash that would reduce ownership equity; as such, it is not a mitigating factor.
Choice "B" is incorrect. Mitigating factors in a going concern situation include plans to dispose of assets, plans to borrow money or restructure debt, plans to reduce or delay expenditures, or plans to increase ownership equity. Issuing stock options does not fall into any of these categories and would not be considered a mitigating factor.
Choice "D" is incorrect. Mitigating factors in a going concern situation include plans to dispose of assets, plans to borrow money or restructure debt, plans to reduce or delay expenditures, or plans to increase ownership equity. Accelerating the due date of an existing mortgage would increase expenditures, and therefore would not be a mitigating factor.

An auditor believes that there is substantial doubt about an entity's ability to continue as a goingconcern for a reasonable period of time. In evaluating the entity's plans for dealing with the adverseeffects of future conditions and events, the auditor most likely would consider, as a mitigating factor, theentity's plans to:

An auditor believes there is substantial doubt about an entity's ability to continue as a going concernfor a reasonable period of time. In evaluating the entity's plans for dealing with the adverse effects offuture conditions and events, the auditor most likely would consider, as a mitigating factor, the entity'splans toAn auditor concludes that there is substantial doubt about an entity's ability to continue as a goingconcern for a reasonable period of time. The entity's financial statements adequately disclose itsfinancial difficulties. Under these circumstances, the auditor's report is required to include anemphasis-of-matter paragraph that specifically uses the phrase(s)

Which of the following audit procedures most likely would assist an auditor in identifying conditionsand events that may indicate there could be substantial doubt about an entity's ability to continue as agoing concern?The refusal of a client's attorney to provide information requested in an inquiry letter generally isconsidered

A client's lawyer is unable to form a conclusion about the likelihood of an unfavorable outcome ofpending litigation because of inherent uncertainties. If the litigation's effect on the client's financialstatements could be material but it is properly disclosed in the financial statements, the auditor mostlikely would:

Which of the following procedures would an auditor ordinarily perform first in evaluating management'saccounting estimates for reasonableness?

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The primary reason an auditor requests letters of inquiry be sent to a client's attorneys is to providethe auditor withWhich of the following factors most likely would cause a CPAnotto accept a new audit engagement?

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