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Hebron, Inc., a Fortune 100 company, has been experiencing poor financial performance. Industry analysts have been...

Hebron, Inc., a Fortune 100 company, has been experiencing poor financial performance. Industry analysts have been issuing negative reports and the company's stock price has been steadily diminishing.

Required: As an auditor, what would concern you about the audit engagement of Hebron, Inc.

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Answer #1

The audit will be concerned about the uncertainties of economic statement fraud which can be done by the administration. It could be changing the accounting estimation or other ways to manage the company's book profits. Accordingly, the audit should exercise professional uncertainty to thoroughly estimate the risk of economic statement fraud.

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