As part of the going concern assumption, auditors are required to evaluate the likelihood of each client continuing as a going concern for a reasonable period of time. Required:

a. List various factors suggesting that a client may not remain a going concern. For each factor, indicate the degree of subjectivity and judgment that would be required in determining if the indicator would, in fact, result in the company going bankrupt (use the following categories: high, medium, low).

b. Assume that the auditors report contains language indicating concern about the ability of the client to continue as a going concern. What does this action say to the users of the financial statements about confidence in managements ability to remain a going concern?