B-09.03 Problem

B-09.03 Problem - B-09.03 Micro Detect Corporation was sued...

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B-09.03 Micro Detect Corporation was sued for securities fraud. It was alleged that the company deliberately overstated income by failing to appropriately recognize losses on its trading securities. Following is the transcript of the testimony given by one of Micro Detect's expert witnesses, Professor Winston, in response to questioning by the company's attorney. Examine the testimony, and determine if any statement made by the professor is patently untrue. Develop a list of questions that an attorney for the plaintiff would want to use to cross examine the professor. Non-GAAP statements in the following testimony may be assumed to be correct; focus only on the assertions about accounting methods. Question: Professor, did Micro Detect realize a loss on its trading securities during the time period in question? Answer: Absolutely not. The company continues to hold the securities that have declined in value. Realization would only occur when the securities are sold.
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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B-09.03 Problem - B-09.03 Micro Detect Corporation was sued...

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