Case 1 7 lincoln savings and loan

The substance over form concept means that transactions should be recorded based on their economic reality as opposed to the contractual form that they assume.

What responsibility, if any, do auditors have when a client violates this principle? Response presumes the student is enrolled in an audit course and is somewhat familiar with terms and audit procedures.

Briefly describe the substance over form concept and exactly what it requires. What responsibility does an auditor have to uncover fraud perpetrated by client management? Audit Case study 1. A client that is not forthcoming about their business, seems to have had trouble with prior auditors, or has extensive related party transactions or less-than-ethical business models gambling may be a reason to consider avoiding the job.

First, are they adequately disclosure so the reader of the financial statements is clear about the extent and nature of them. Why or why not? Arthur Young was criticized for not encouraging Lincoln to invoke the substance-over-form principle when accounting for its large real estate transactions.

What responsibility does an auditor have to uncover fraud perpetrated by client management? Under what circumstances such prospective clients should be avoided? What measures should an auditor take to determine that such transactions have been properly recorded by a client? The lease payments may really represent principle and interest payments for an asset purchase.

Lincoln Savings and Loan Association 1. It is a judgment about whether to accept a new client and not standard rules. Again support your answer. Under what circumstances such prospective clients should be avoided?

Lincoln Savings and Loan Association - 9 questions

What are the key assertions that Arthur Young should have attempted to substantiate for the Hidden Valley transaction?

An example is a lease. Their awareness that this client is a "big deal" to the CPA firm makes them a bit tentative about rocking the boat. Briefly describe the substance over form concept and exactly what it requires.

What responsibility if any do auditors have when a client violates this principle? Arthur Young was criticized for not encouraging Lincoln to invoke the substance-over-form principle when accounting for its large real estate transactions.

Audit Case study 7 – Lincoln Savings and Loan Association

Two duties are important with related party transactions. What measures should an auditor take to determine that such transactions have been properly recorded by a client? What was the significance of Lincoln receiving nonrecourse notes rather than recourse notes as payment or partial payment on many of the properties it sold?

What was the significance of Lincoln receiving nonrecourse notes rather than recourse notes as payment or partial payment on many of the properties it sold?

Again, support your answer. Discuss factors that mitigate this responsibility and actors that compound it.

Discuss factors that mitigate this responsibility and actors that compound it. What are the key assertions that Arthur Young should have attempted to substantiate for the Hidden Valley transaction? Then, they should record and report the transaction based on its economic substance.

What procedures should Arthur Young have used for this purpose and what types of evidence should have been collected? Why or why not? What procedures should Arthur Young have used for this purpose, and what types of evidence should have been collected?

Solution Summary Your response is 1, words and includes examples from the Lincoln Savings and Loan Case specified in the posting.Your response is 1, words and includes examples from the Lincoln Savings and Loan Case specified in the posting. Response presumes the student is enrolled in an audit course and is somewhat familiar with terms and audit procedures.

Case Lincoln Savings and Loan. assumes that someone is attempting to deliberately hide a transaction as one that meets GAAP standards although in reality the transaction would affect the financial statements differently than reported. This form of deceit was used over and over by Lincoln S&L.

The biggest example provided was on page 87. Case Lincoln Savings and Loan words 7 pages. Show More Case of Lincoln Electric Company words | 11 pages we know that Lincoln Electric Company is a famous company and it has high profit for it has some unusual system and rule.

However, according to today business, we could know that the Lincoln Electric. The Case study Lincoln Savings and Loan Association 1) Arthur Young was basically criticized for not encouraging Lincoln to make use of the substance-over-form principle when accounting for the large real estate transactions.

CASE LINCOLN SAVINGS AND LOAN ASSOCIATION Synopsis The collapse of Lincoln Savings and Loan Association in was one of the most expensive and controversial savings and loan failures in U.S.

history%(16). This case focuses on the collapse of Lincoln Savings and Loan Association in The estimated losses linked to this collapse are $ billion.

Charles Keating Jr. is an example of an aggressive and risk seeking individual who took advantage of the savings and loan industry when it was deregulated.

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Case 1 7 lincoln savings and loan
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