Unformatted text preview: earnings!” Answer the following questions in the Discussion Board: a. What are the ethical issues concerning Frost’s practice of changing the useful lives of fixed assets? The ethical concern surrounding Frost’s practice is that is changing the useful life in order to “inflate earnings” is dishonest. This act creates fake earnings. b. Who could be harmed by Frost’s unusual accounting changes? Investors are the main people who become harmed by their actions. The inflated earnings would give a false sense of where the company actually stood financially. c. What should Crane do in this situation? Since the change in the useful life is unwarranted Crane should document everything in his audit report. Kieso, D. E., Weygandt, J. J., Warfield, T. D. (2013). Intermediate Accounting, 15th Edition ....
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- Winter '15
- Accounting, Generally Accepted Accounting Principles, Mike Crane, unusual accounting changes