When Lehman was developing its Repo 105 accounting policy, did E&Y have a responsibility to be involved in that process? In general, what role should an audit firm have when a client develops an important new accounting policy? Comment on an audit firm’s responsibilities during and following that process.
Answer to relevant QuestionsDo 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 ...In general, what responsibility do auditors have to investigate whistleblower allegations that relate to the material accuracy of an audit client’s financial statements?BDO Seidman’s attorneys pointed out correctly that professional standards do not prohibit auditors and client personnel from being “friends.” At what point do such relationships result in violations of the auditor ...In addition to the data shown in Exhibit 1 and Exhibit 2, what other financial information would you have obtained if you had been responsible for planning the 1991 Leslie Fayaudit?Assume the role of Oliver Flanagan in this case. What would you have done when Thomas Trauger asked you to help him alter the 2000 Next-Card audit work-papers? In answering this question, identify the alternative courses of ...
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