Question: The following two statements are made in the case: Accounting experts said the case is sure to be closely watched by others in the

The following two statements are made in the case:

• Accounting experts said the case is sure to be closely watched by others in the business community for the message it sends about where the line lies between fraud and the acceptable use of discretion in accounting.

• Darren Henderson opined that "The message . . . is that it is okay to use accounting judgments to achieve desired outcomes, [such as] a certain earnings target."

Evaluate these statements from the perspectives of representational faithfulness and fair presentation of the financial results reported by Nortel.

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