Do you agree with the assertion that “intent doesn’t matter” when applying accounting rules? That is, should reporting entities be allowed to apply accounting rules or approved exceptions to accounting rules for the express purpose of intentionally embellishing their financial statements or related financial data? Defend your answer.
Answer to relevant QuestionsDo auditors have a responsibility to determine whether important transactions of a client are “accounting-motivated”? Defend your answer.E&Y is a defendant in Lehman-related lawsuits filed in both state and federal courts. Identify the factors that influence E&Y’s legal exposure between lawsuits filed in state courts versus those filed in federal courts.According to court testimony, on 20 July 1995, Drew Bergman recommended to HMI’s board of directors that Mei-ya Tsai be hired as the company’s chief accounting officer (CAO). One week later, BDO Seidman issued its audit ...List nonfinancial variables or factors regarding a client’s industry that auditors should consider when planning an audit. For each of these items, briefly describe their audit implications.Arthur Young was criticized for not encouraging Lincoln to invoke the substance-over-form principle when accounting for its large real estate transactions. Briefly describe the substance-over-form concept and exactly what it ...
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