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Unformatted text preview: U.S. company of
your choice. Identify whether or not the audit report is an unqualiﬁed,
or “clean,” opinion.
LO 9 1-29 Using the audit report included in Chapter 1, identify and record the
phrases or words that indicate to the users that the ﬁnancial statements
are not an “exact” representation of the results of operations and ﬁnancial
position of a company. D ISCUSSION CASE
LO 1,3,5,6,9,10 1-30 The Government Accountability Ofﬁce (GAO) gave the following results in
a report based on an examination of 39 failed banks:10
The early warning system provided by bank call reports* is seriously
ﬂawed. The 39 failed banks’ call reports did not provide the regulators with
advance warning of the true magnitude of the deterioration in the banks’
ﬁnancial condition. As a result of the asset valuations FDIC prepared after
these banks failed, loss reserves increased from $2.1 billion to $9.4 billion. A major portion of the $7.3 billion deterioration in asset values was
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