Some criticize the accounting profession for using expressions in the audit report that seem to build in deniability should the client commit a fraudulent act. What expressions enable the CPA to build a defense should the audit wind up in the courtroom? How does your analysis relate to the opening statement in the chapter by Abe Briloff?
Answer to relevant QuestionsThe audit report on General Motors for 2008 issued by Deloitte & Touche included the following statement: “The Corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient ...Kinetics, Inc., included the following footnote in its December 31, 2013, financial statements:We corrected the misstatement of capitalized advertising costs recorded in 2012 by adjusting operating expenses for 2013, and ...1. Analyze each revenue recognition technique identified in the audit committee investigation and explain whether each technique violates revenue recognition rules in accounting. Evaluate the practices followed by CA from an ...1. An eight-month investigation by OFHEO concluded that slack standards at Fannie Mae created a corporate culture “that emphasized stable earnings at the expense of accurate financial disclosures.” What is wrong with ...A subsequent event is one that occurs after the date of the financial statements (i.e., December 31, 2013) but prior to the auditor having dated (or possibly issued) the audit report (i.e., March 15, 2014). One type of ...
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