Part I:

A well-known, simple characterization that gets at the very essence of the purpose of auditing includes the following phrase: Auditing is the difference between management telling the truth, and users believing it.

1. What does this phrase mean to you?
2. Have you ever told the truth and had someone refuse to believe it?
3. How does this phrase relate to the usefulness of the auditor report?

Part II:

There are different reporting deadlines for U.S. public companies. Please refer to the textbook for more details and answer the following questions:

1. Does this difference seem fair to you from a user perspective?
2. What reasons do you think that the SEC has for allowing nonaccelerated filers to have more time to provide these disclosures?
3. All else held equal, would you prefer to invest in a company that provides disclosures after 60 days, or one that provides disclosures after 90 days?