2. In addition to the questionable in-transit-inventory BDO Seidman also had greater than normal concerns with which of the following other items regarding the Health Management, Inc. engagement?
   1. The auditors felt that companys allowance for doubtful account was too high
   2. Health Management, Inc.s decision to publicly announce earnings before the audit was complete.
   3. Receipt of an anonymous letter questioning certain accounting procedures used by Health Management and a possible threat to the audit firms independence.
   4. All of the above.

3. The BDO Seidman partner-in-charge (Fred Borstein) of the Health Management audit justified accepting their clients allowance for doubtful accounts of $600,000 instead of the auditor proposed amount of $1,200,000 on which of the following grounds?
   1. The financial statements are the clients responsibility.
   2. The auditors may be wrong.
   3. The audit firm was satisfied with Health Managements explanation for the $600,000 figure.
   4. The disputed amount was immaterial.
   5. All of the abov
   6. Choices a; b; and c.