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

Exercise 3

Consult Paragraph 7 of PCAOB Auditing Standard No. 13. Do you believe that Andersen's final decision regarding the PAJEs was appropriate under the circumstances? Would your opinion change if you knew that all of the adjustments were based on subjective differences (such as a difference in the estimate of the allowance for doubtful accounts) as compared to objective differences (such as a difference in the account receivable balance of their biggest customer)?