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Phil Nanere is the partner in charge of the audit for a new client, Western Wonderland (WW). The client changed auditors and engaged Phil's audit
Phil Nanere is the partner in charge of the audit for a new client, Western Wonderland (WW). The client changed auditors and engaged Phil's audit firm in November 2019, in preparation for the 2020 audit. From January 30, 2020, onwards, WW has consistently paid its suppliers late, well in excess of the suppliers' agreed credit terms. This has resulted in some suppliers demanding cash on delivery from WW. Phil is also aware from his review of correspondence between WW and its bank that the company has been experiencing cash flow problems since 2017. Which of the following events or conditions may cast significant doubt on WW's ability to continue as a going concern? Paying suppliers late Correspondence between WW and the bank Drop in demand for products Suppliers are demanding cash Slow collections of accounts receivable Change of auditor
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