Question

Mini- Case: Going- Concern Reporting. Refer to the mini- case “GM: Running on Empty” on page C11 and respond to questions 1, 2, and 3.

On page C11
1. Reviewing GM’s financial information in GM Exhibit 1 and its stock price in GM Exhibit 2 , when do you first see signs of GM’s impending financial distress?
2. In referencing professional standards, what factors should auditors consider in evaluating potential going- concern uncertainties?
3. Considering your response to questions 1 and 2, do you believe that the going- concern uncertainty was warranted? Do you believe that Deloitte & Touche should have issued a going- concern opinion prior to 2008?
4. What economic factors existing in the United States during 2008 might have accelerated Deloitte & Touche’s decision to issue an audit opinion modified to disclose going- concern uncertainties?

GM EXHIBIT 1


GM EXHIBIT2


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  • CreatedOctober 27, 2014
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