Going Concern Qualifications - past companies, how do auditors decide, HNR?

[claphands22]

1. How do auditors decide if a company deserves a going concern qualification? Is there a standardized test or is it due to their best judgement? Based more on liquidity or solvency, or does it depend more on the situation?

 

2. What experience do you have with investing with companies with a going concern qualification? What made you decide the qualification wasn't necessary?

 

 

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Been thinking about HNR's going concern qualification. Must be because the Indonesian deal fell through, but I wonder, if they were wiling to pay 750MM than someone would be willing to pay at least half. Maybe there is no way of getting a new deal off in time so they'll inevitably have liquidity issues.

 

Anyways, going concern qualifications seems like a reasonable place for investors to fish. I wonder if anyone here has experience with investing in these situations. What were lessons learned?

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Thanks!