Esmerelda Company ( EC ) manufactures a cleaning solution for furniture and soft goods. Recently, a customer
Fantastic news! We've Found the answer you've been seeking!
Question:
Esmerelda Company EC manufactures a cleaning solution for furniture and soft goods. Recently, a customer sued EC because the cleaning solution ruined their sofa, claiming that it did so even though they followed the directions to the letter". The lawyer believes that the lawsuit is meritless and is confident that the lawsuit will be thrown out.
How should EC handle this?
A good response will list the criteria for both ie provisions and contingent liabilities evaluate each criterion with information provided in the question, and where needed, make reasonable assumptions to assess the criteria if no information is available, and then provide a conclusion based on the analysis of both the provision and the contingent liabilities. No "fence sitting" allowed this means that it cannot be both, and the decision should not be left up to the client. Therefore, you will have to make a decision as to how it should be handled.
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
Posted Date: