Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 6

Adjusting entries. During your audit of the Long-Term Debt and Owners' Equity accounts, you notice several adjusting journal entries in them at year-end.
a. Identify several questions that you should ask management regarding the entries.
b. Describe two possible scenarios to explain the entries that involve adjustments associated with error corrections.
c. Describe two possible scenarios that involve fraud to explain the entries.