Assignment Audit Completion Reporting and Legal Liabilities of the Audit Firm business and finance homework help

DISCUSSION QUESTIONS
1. Reviewing GM’s financial information in GM Exhibit 1 and its stock price in GM Exhibit 2 , when do you first see signs of GM’s impending financial distress?
2. In referencing professional standards, what factors should auditors consider in evaluating potential going- concern uncertainties?
3. Considering your response to questions 1 and 2, do you believe that the going- concern uncertainty was warranted? Do you believe that Deloitte & Touche should have issued a going- concern opinion prior to 2008?
4. What economic factors existing in the United States during 2008 might have accelerated Deloitte & Touche’s decision to issue an audit opinion modified to disclose going- concern uncertainties?
5. Do you believe that the events immediately following GM’s bankruptcy alleviated the concerns that led to the issuance of the going- concern uncertainty? What issues would auditors need to consider in evaluating the ability of General Motors Co. (the new GM) to continue as a going concern?
6. Many companies believe that a going- concern opinion is a self- fulfilling prophecy ( that is, when a company receives a going- concern opinion, customers will not purchase products with warranties, suppliers will not provide short- term credit, and investors and creditors will not invest or loan). Would GM’s going- concern opinion influence your decisions regarding either purchasing a car from GM or investing in GM’s stock? Is a going- concern a self- fulfilling prophecy?

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