Why is earnings per share required for audit purposes? Because there needs to be more focus on retained earnings after dividends. Because preferred shareholders are concerned that the common shareholders are receiving more dividends Because there needs to be more focus on earnings available to common shareholders. Because preferred shareholders are not concerned because they are going to get their dividends anyway. 3 Question 26 ABC hospital has been sued by a patient and the patient has won the lawsuit. What are the disclosures in the notes to the financial statements and accounting for the verdict? Disclosure in the financial statements as a contingent liability and accounting is not necessary No disclosure and no accounting. None of the above. Disclosure in the financial statements as a contingent liability, an increase in lawsuit judgment expense and disclosure in the notes to the financial statements