Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 10

Footnote disclosure. Your audit client will disclose information only that you force it to disclose.
a. What is the basic requirement for disclosure in an annual report
b. The client believes that any events that do not affect the financial statements can be ignored in the footnotes. Is this correct Explain your answer.
c. The client doesn't understand why you would ask them to disclose items that are uncertain. The company knows that you won't allow them to speculate in their financial statements, so they don't understand the reason for disclosing items based on speculation before the event actually occurs. Can you answer the client's question