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2 ParagraphsAPA Formatted References This is the first year that you have audited Hurst & Johnson Corporation. You discovered that the company is carrying its property, plant, and equipment at...

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2 ParagraphsAPA Formatted References

This is the first year that you have audited Hurst & Johnson Corporation. You discovered that the company is carrying its property, plant, and equipment at appraisal values and determines depreciation on the basis of these values. This is considered a very large scope-limitation, and you have not been able to form an opinion on the financial statements taken as a whole.

  • Discuss the ethical issues involved with this situation.
  • Explain how you should handle this situation.
  • Explain what type of report you should issue and why.

In your own words, please post a response to the Discussion Board and comment on at least 2 other postings. You will be graded on the quality of your postings.

The following rubric will be used for grading:

Grading Rubric

30%

Discuss the ethical issues involved with this situation.

20%

Explain how you should handle this situation.

40%

Explain what type of report you should issue and why.

Answered Same Day Dec 23, 2021

Solution

Robert answered on Dec 23 2021
127 Votes
Auditing Case
The case is regarding the company Hurst & Johnson Corporation, which is following
wrong practice of recording its property, equipment and plant. The company is recording them at
appraisal values and depreciation is also calculated on the same. It is not calculated on the cost.
The company is violating the basic accounting principle of historical cost. As per historical cost
principles, all the assets and liabilities shall be shown...
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