1. Describe the reasons a nave observer would consider it overkill to scrutinize a companys financial statements for signs that management is presenting anything less than a candid picture?

2. How does that method of accounting for a merger or acquisition affect the combined companies subsequent competitive strength, ability to generate cash, or reported earnings; and what are the clues that there may be something amiss in an M&A?

3. a) Explain the tension that exists for the auditing firm? (b) What can be said about the existing provisions for issuing financial accounting standards?