Question
Describe how management might be able to use (manipulate) the different debt investment classifications to help improve their company's reported net income. Be sure to
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Describe how management might be able to use (manipulate) the different debt investment classifications to help improve their company's reported net income.
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Be sure to consider management's incentives for how they would want to classify their investment winners versus their losers.
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As an auditor, what are some of the key ways in which you might test whether management has appropriately classified their debt investments? For example, how might you be sure management correctly used the held-to-maturity classification?
Describe how management might be able to use (manipulate) the different debt investment classifications to help improve their company's reported net income.
-
Be sure to consider management's incentives for how they would want to classify their investment winners versus their losers.
As an auditor, what are some of the key ways in which you might test whether management has appropriately classified their debt investments? For example, how might you be sure management correctly used the held-to-maturity classification?
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Accounting Principles
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
12th edition
1119132223, 978-1-119-0944, 1118875052, 978-1119132226, 978-1118875056
