Question

a. Consider Ford's inventory account on the balance sheet, along with the accompanying footnote. What are the most relevant assertions that management is making with regard to its inventory?
b. Ford, in particular, is working to change models from SUVs to more fuel-efficient, smaller cars. How might that change affect the valuation of its bigger pickups and SUVs?
c. What assertions are implied in the Property, Plant, and Equipment account? How would valuation be affected if the company decided to downsize and eliminate a line of pickup trucks?
d. Examine the assets on the balance sheet of Ford. Identify the assets that are subject to
(a) Fair value adjustments,
(b) Impairment tests,
(c) Estimates to either net realizable value or lower of cost or market value.
What are the implications for audit evidence that will be gathered for these accounts?
e. Consider Ford's debt account on the balance sheet, along with the accompanying footnote. What are the most relevant assertions that management is making with regard to its debt?



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  • CreatedSeptember 22, 2014
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