Surfer Dude Duds Case - the Big Five 9 (now Big Four)...

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“Teetering on the Brink…” CFO.Com (4/25/02) In 54% of the 673 largest bankruptcies of public companies since 1996, auditors provided no cautions in annual financial statements in the months before the bankruptcy filing. … auditors raise concerns much less frequently with large companies than with small ones. Indeed, auditors only issued warnings in 14 of the 50 largest bankruptcy cases since 1996…. On the other hand, auditors raised red flags at 35 of the 50 smallest companies that declared bankruptcy over the past five years. 97% of all publicly traded U.S. companies are audited by
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Unformatted text preview: the Big Five 9 (now Big Four) accounting firms. Discussion Questions 1. What are Marks options? Do professional standards make the decision clear? 2. Might the going concern reference in the audit report become a self-fulfilling prophecy for SDD? 3. What would the going concern paragraph accomplish? How might Mark convince George that such an opinion is in everyones best interests? 4. Is it appropriate to have such a friendly relationship with a client? What factors might tend to keep Mark objective in his judgments?...
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Surfer Dude Duds Case - the Big Five 9 (now Big Four)...

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