Question: Sharon Waters is an auditor. Her work at two companies disclosed inappropriate recognition of revenue. Both cases involved dollar amounts in the $100,000 range. In

Sharon Waters is an auditor. Her work at two companies disclosed inappropriate recognition of revenue. Both cases involved dollar amounts in the $100,000 range. In one case. Waters considered the item material and required her client to restate earnings. In the other case, Waters dismissed the misstatement as being immaterial.

Required
Write a memo that explains how a $100,000 misstatement of revenue is acceptable for one company but unacceptable for a different company.

Step by Step Solution

★★★★★

3.43 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The memo should contain some of the following inform... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

118-B-C-A-I-C-C (658).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

The Blanket Company (TBC) manufactures two types of blankets. One is made of nylon. The other is made of wool. The budgeted per-unit contribution margin for each product follows. TBC expects to incur...

Melissa Moore is an auditor. Her work at two companies disclosed inappropriate recognition of revenue. Both cases involved dollar amounts in the $200,000 range. In one case, Moore considered the item...

Sarah Bale is an auditor. Her work at two companies disclosed inappropriate recognition of revenue. Both cases involved dollar amounts in the $100,000 range. In one case, Bale considered the item...

1. Write Dorothy a memo that explains the Box-Jenkins methodology. 2. Develop an ARIMA model using the Box-Jenkins methodology, and forecast the monthly number of new clients for the rest of 1993. 3....

help please with all of them Bequired wewid this type of liability be shuses in the accombling seeme? itdionatily estimable. How would this type of liability to 4bown in the acocoun as reseode" in...

Nortel: The Rise and Fall of a Telecommunications Company1 By Timothy Fogarty, Michel L. Magnan, Garen Markarian Timothy Fogarty is a professor of taxation and business law at the Weatherhead School...

Application Applying Accounting Standards Managers must make decisions with respect to the financial reporting necessary to apply accounting standards. Consider the article ?Halliburton: Accounting...

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...

Given the findings presented by Desir et al. 2010, what evidence do they provide that might explain why there were so many people who opposed the proposed standard to enhance disclosures on expected...

Suppose f: [a, b] R is a bounded function. For n Z+, let P, denote the partition that divides [a, b] into 2" intervals of equal size. Prove that L(f, [a, b]) lim L(f, Pn, [a, b]) and U(f, [a, b]) =...

Dumping of goods abroad A) constitutes a general case for permanent tariffs B) may be part of a firm's price discrimination strategy C) may be part of a nation's strategy to rectify its trade deficit...

Solve the given initial - value problem. y d x d y - x = 4 y 2 , x ( 9 ) = 1 x ( y ) = Give the largest interval I over which the solution is defined for the given initial condition. ( Enter your...

Chang Corporation sells products for $120 each that have variable costs of $80 per unit. Chang's annual fixed cost is $720,000. Required Use the per-unit contribution margin approach to determine the...

Dannica Corporation produces products that it sells for $40 each. Variable costs per unit are $25, and annual fixed costs are $360,000. Dannica desires to earn a profit of $150,000. Required a. Use...

Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it pays the $30,000 annual insurance premium on the manufacturing facility. Accordingly, the January...

Accelerator, Inc., manufactures a fuel additive, Surge, that has a stable selling price of $44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your...

Comparing an ABC system with a traditional cost system Use the information in Exercise 5-6B to complete the following requirements. Assume that before shifting to activity-based costing, Chase...

9.27 Can a relational database be used to store XBRL metadata? Explain your answer. What other options are organizations using to store XBRL metadata in a database? (Q9.5)

Give an example of why the statement, All direct costs are avoidable, is incorrect.

What are the important factors in determining the appropriate cost driver to use in allocating a cost?

How is an allocation rate determined? How is an allocation made?

Your client is 34 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $14,000 per year, and you advise her to invest it in the stock...

Forbes measure the boiling point of water in the Alps (in degrees F) and the air pressure (in inches of Hg). The SPSS output and a plot of the data are shown below (and also in FIGURE 37-A ). The...

Programming \#3 (10 points) Write a program that prompts the user to enter the coordinates of two points (x1,y1) and (x2,y2), and displays the slope of the line connects the two points. The formula...