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Acc 400 17-37

In: Business and Management

Submitted By lorenmey
Words 441
Pages 2
Loren Meyer
Acc 400
Case 17-37 1. Your client has declined to depreciate its assets this year because the depreciation expense would reduce the year's small income to a loss. 2. A client's financial statements follow GAAP, but you wish to emphasize that the client is a subsidiary of Webster Corporation in the audit report. 3. In auditing the long-term investments account of a new client, you are unable to obtain audited financial statements for the investee located in a foreign country. You conclude that sufficient appropriate audit evidence regarding this investment cannot be obtained. 4. Due to a very major lawsuit, you have substantial doubt about a client's ability to continue as a going concern for a reasonable period of time. The financial statement disclosures related to this lawsuit are adequate. 5. You decide not to take responsibility for the work of the component auditors who audited a 70 percent owned subsidiary and issued an unmodified opinion. The total assets and revenues of the subsidiary are 5 percent and 8 percent, respectively, of the total assets and revenues of the entity being audited. 6. You decide to take responsibility for the work of the component auditors who audited a 70 percent owned subsidiary and issued an unmodified opinion. The total assets and revenues of the subsidiary are 5 percent and 8 percent, respectively, of the total assets and revenues of the entity being audited. 7. A company has changed the remaining life of a significant asset from 12 to 10 years. You believe that the change is reasonable. 8. A company changes from FIFO to LIFO for inventory valuation and you concur with the change. The change has an immaterial effect on the entity's financial statements this year, but it is expected to have a material effect in the future. 9. Your client is a defendant in a major lawsuit. It is…...

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