Control and accounting information systems suggested answers to discussion questions


You recognized the treasurer as a former aide to Ernie Eggers, who was convicted of fraud several years ago



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rais12 SM CH07
You recognized the treasurer as a former aide to Ernie Eggers, who was convicted of fraud several years ago.

  • Management explained its plans to change accounting methods for depreciation from the accelerated to the straight-line method. Management implied that if your firm does not concur with this change, Go-Go will employ other auditors.

  • You learned that the financial vice president manages a staff of five internal auditors.

  • You noted that all management authority seems to reside with three brothers, who serve as chief executive officer, president, and financial vice president.

  • You were told that the performance of division and department managers is evaluated on a subjective basis, because Go-Go’s management believes that formal performance evaluation procedures are counterproductive.

  • You learned that the company has reported increases in earnings per share for each of the past 25 quarters; however, earnings during the current quarter have leveled off and may decline.


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