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

Exercise 3

Consult Paragraphs 17-23 of PCAOB Auditing Standard No. 14. As discussed in the case, during both the 1996 and 1997 audits, Phillip Harlow allegedly discovered a number of different accounting entries made by Sunbeam that were not compliant with Generally Accepted Accounting Principles (GAAP). Speculate about how Harlow might have explained his decision not to require Sunbeam to correct these alleged misstatements in the audit workpapers.