Auditing and Accounting Cases 4th Edition by Deborah Freier,Jay Thibodeau

Exercise 1

Consult Paragraphs 4-8 of PCAOB Auditing Standard No. 15. Next, consider the alleged accounting improprieties related to increased expenses from the 1996 audit. If you were auditing Sunbeam, what type of evidence would you like to review to determine whether Sunbeam had recorded the litigation reserve amount and the cooperative advertising amount in accordance with GAAP?