Harold, CPA, believes there is substantial doubt about the ability of Jersamtan Co. to continue as a going concern for a reasonable period of time. In evaluating Jersamtan's plans for dealing with the adverse effects of future conditions and events, Harold most likely would consider, as a mitigating factor, Jersamtan's plans to
Harold, CPA, believes there is substantial doubt about the ability of Jersamtan Co. to continue as a going concern for a reasonable period of time. In evaluating Jersamtan's plans for dealing with the adverse effects of future conditions and events, Harold most likely would consider, as a mitigating factor, Jersamtan's plans to
Chapter6: Professional Roles
Section6.7: Madison Wells, Audit Manager
Problem 4Q
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Harold, CPA, believes there is substantial doubt about the ability of Jersamtan Co. to continue as a going concern for a reasonable period of time. In evaluating Jersamtan's plans for dealing with the adverse effects of future conditions and events, Harold most likely would consider, as a mitigating factor, Jersamtan's plans to
- Discuss with lenders the terms of all debt and loan agreements.
- Postpone expenditures for research and development projects.
- Purchase production facilities currently being leased from a related party.
- Strengthen internal controls over cash disbursements.
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