Many companies believe that a going-concern opinion is a self-fulfilling prophecy (i.e., when a company receives a going-concern opinion, customers will not purchase products with warranties, suppliers will not provide short-term credit, and investors and creditors will not invest or loan). Would GM’s going-concern opinion influence your decisions regarding either purchasing a car from GM or investing in GM’s stock? Is a going-concern a self-fulfilling prophecy?
Many companies believe that a going-concern opinion is a self-fulfilling prophecy (i.e., when a company receives a going-concern opinion, customers will not purchase products with warranties, suppliers will not provide short-term credit, and investors and creditors will not invest or loan). Would GM’s going-concern opinion influence your decisions regarding either purchasing a car from GM or investing in GM’s stock? Is a going-concern a self-fulfilling prophecy?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Many companies believe that a going-concern opinion is a self-fulfilling prophecy (i.e., when a company receives a going-concern opinion, customers will not purchase products with warranties, suppliers will not provide short-term credit, and investors and creditors will not invest or loan). Would GM’s going-concern opinion influence your decisions regarding either purchasing a car from GM or investing in GM’s stock? Is a going-concern a self-fulfilling prophecy?
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