Question 1: Some of the items on the balance sheet are based on estimated information. Consider managements responsibility when it comes to the use of estimates (e.g., net realizable value of receivables, valuation of inventories, accumulated depreciation, etc).

1. Desccribe the incentivies management has to misrepresent estimates.

2. With the core values of excellence and intergrity in mind, discuss controls and procedures companies can put in place to prevent misrepresentation of these estimates.

Quesrtion 2: What does the concept of objectivity imply for information reported in financial statements?