Choice "C" is correct. The nature of management's plan to sell or liquidate assets could provide valuable information to the auditor regarding whether or not the entity can continue to function as a going concern. Choice "b" is incorrect. Audit fees have no bearing on a client's going concern issue. Choice "a" is incorrect. This item would not be directly relevant when determining if there is a going concern issue. Choice "d" is incorrect. The future outcome of a pending lawsuit that is more than one year away is a contingency that would not have a significant impact on a going concern issue for a current audit. Under U.S. GAAP, the going concern period is one year.
