PQR Ltd., a manufacturing company, has been facing operational challenges. Recently, they struggled to find essential raw materials due to supply…
CA Intermediate · Auditing and Ethics · MTP · May 2025
PQR Ltd., a manufacturing company, has been facing operational challenges. Recently, they struggled to find essential raw materials due to supply chain disruptions. This shortage has significantly impacted production, leading to delays in fulfilling customer orders. The company's financial health has also deteriorated, with declining cash flows leading to inability to pay creditors on time. Additionally, key financial ratios have worsened, and the company has stopped paying dividends to shareholders due to liquidity concerns. Given this situation, which of the following is not a financial event or condition that may cast significant doubt on the entity's ability to continue as a going concern?
Suggested Answer and Working Notes:
Correct Answer: Option (C)
Shortages of important supplies.
Topics: Audit Strategy, Audit Planning and Audit Programme
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