Chapter 11 DISCUSSION QUESTIONS GM running on empty ------------------------------------------------ 1. Reviewing GMs financial information in GM Exhibit 1 and its stock price in GM Exhibit 2, when do you first see signs of GMs impending financial distress? 2. In referencing professional standards, what factors should auditors consider in evaluating potential going-concern uncertainties? 3. Considering your response to questions 1 and 2, do you believe that the going-concern uncertainty was warranted? Do you believe that Deloitte & Touche should have issued a goingconcern opinion prior to 2008? 4. What economic factors existing in the United States during 2008 might have accelerated Deloitte & Touches decision to issue an audit opinion modified to disclose going-concern uncertainties? 5. Do you believe that the events immediately following GMs bankruptcy alleviated the concerns that led to the issuance of the going-concern uncertainty? What issues would auditors need to consider in evaluating the ability of General Motors Co. (the new GM) to continue as a going concern? 6. Many companies believe that a going-concern opinion is a self-fulfilling prophecy (i.e., when a company receives a going-concern opinion, customers will not purchase products with warranties, suppliers will not provide short-term credit, and investors and creditors will not invest or loan). Would GMs going-concern opinion influence your decisions regarding either purchasing a car from GM or investing in GMs stock? Is a going-concern a self-fulfilling prophecy