Natalie Winters is the senior accountant for Delftmore, Inc. Terrell Jeffrey is a staff accountant who reports to Natalie. The company is projected to show lower earnings this year as compared to the previous two years. The CEO of the company is pressuring Natalie to be “creative” in figuring out a way to increase net income for the year. Natalie explains the problem to Terrell, asking for his help. After discussing the situation, the two accountants decide that their best choice is to change accounting estimates or accounting principles to either lower expenses or increase net income.

Address the following questions in your post: What kind of concerns might be causing the CEO to “lean on” the accountants to change the accounting records?

Why would the accountants be willing to do what the CEO asked?

How can changing accounting estimates and principles impact net income?

What types of changes would increase income or lower expenses? Which type of changes have the best chance of looking legitimate?

How does the requirement for retrospective or prospective adjustments impact Natalie’s and Terrell’s plan to falsify the financial statements?

If you are auditing Delftmore’s financial statements how might you figure out the ways that the financial statements have been misrepresented?

Your initial post must be a minimum of 100 words. It must be your original work. Do not plagiarize. Cite your sources when appropriate. Record your word count at the bottom of your initial post. You will not be able to see your classmate’s posts until you have submitted your initial post.