41. How should auditors search for hidden liabilities? 42. A mid-sized company has a standard sales...

 

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41. How should auditors search for hidden liabilities? 42. A mid-sized company has a standard sales contract, but sales personnel frequently modify the terms of the contract. The nature of the modifications can af- fect the timing and amount of revenue recognized. Individual sales transactions are frequently material to the entity, and the gross margin can vary signifi- cantly for each transaction. 41. How should auditors search for hidden liabilities? 42. A mid-sized company has a standard sales contract, but sales personnel frequently modify the terms of the contract. The nature of the modifications can af- fect the timing and amount of revenue recognized. Individual sales transactions are frequently material to the entity, and the gross margin can vary signifi- cantly for each transaction.

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1 No business is perfect Some liabilities or poorly performing assets are obvious and stated debts and payables uncollectable accounts receivable obso... View the full answer