USSC Case:

QUESTIONS 1. Identify audit procedures that, if employed by Ernst & Whinney during the 1981 USSC audit, might have detected the overstatement of the leased and loaned assets account that resulted from the improper accounting for asset retirements

2. In 1981, USSC extended the useful lives of several of its fixed assets and adopted salvage values for many of these same assets that previously had not been assigned salvage values. re these changes permissible under generally accepted accounting principles? Assuming that these changes had a material effect on USSC's financial condition and results of operations, how should they have been disclosed in the company's financial statements? How should these changes have affected Ernst & Whinney's 1981 audit opinion? (Assume that the current audit reporting standards were in effect at the time.)