Surfer Dudes Dud's
Essay by asteavenson • March 7, 2015 • Essay • 371 Words (2 Pages) • 1,064 Views
Surfer Dude Dud's
1. Mark has the option to either put the going-concern on the report or not. But truthfully he does not have an option. As an auditor he has his responsibility to the public, so there for he should be letting them know how he feels about the company's financials so that many others do not lose out on money if they do go belly up.
2. The issuance of a going-concern explanatory paragraph can become a "self-fulfilling prophecy", because companies do not think that they can recover from them. So from just receiving them they ultimately fail. It is almost like telling the world that this is what their future is and then no other companies will want to do business with them unless they have all monies up front.
3. If Mark does decide to issue the report without the going-concern paragraph then later someone could issue a complaint with the firm and the accountant could face criminal and civil fines as well as prison time.
4. Mark has a responsibility to the public to report the going-concern so they have an accurate look of the company. To convince George that he would not be making the correct decision not including the going-concern he could remind him of all of the penalties that are involved if they do not include it and someone does go after them. He may not enjoy the waves to much behind bars.
5. It is not appropriate for an auditor to have a friendship with a client. When he found that he was building that friendship he should have past the account to another accountant at the firm that he knew would take care of them but that way he would not be asked to do something that was unethical.
6. That the public is counting on him to be objective, and that he would just be prolonging the inevitable. The lenders and investors should also not lose out just because George is his friend. He should also want to keep a good name for himself as an auditor.
7. Mark should do his best to convince George that issuing the going-concern paragraph is what is best and also let him know that he is going to have to do that regardless. That is his job.
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