After you read the case study in the attahement pleace answer thes following questions :
1. List 7 or more principles of accounting are violated in this story. Give an example of each principle violated. (there are at least 7 are in the attachement )
Student’s example response identifying two of the seven principles:
- Going Concern Principle: This is because when organizations assets are valued, it is assumed that the organization will be in the foreseeable future. If it appears that the organization will not remain a going concern, the auditor has to indicate that in his or her report. Mr. Ed before he met his new venture capitalist wanted to declare bankruptcy and wanted me to hide in the financial statement.
2. Would you accept Mr. Ed’s offer of employment? Why or why not?