An analyst assessed a company and determined the company reported a "high quality of earnings." This implies that management issued a press release indicating it was not aware of any fraud during the current year. the company’s management exercised little or no discretionary influence in reporting financial statement information to shareholders. management has used its influence in determining the dollar amounts reported on financial statements. income statement items reported during the current period can be expected to reflect future income levels.

Introduction: Income statement: All revenues and expenses are to be shown in Income statement. It…

Answered: An analyst assessed a company and…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.2: Lehman Brothers Holdings, Inc.

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An analyst assessed a company and determined the company reported a "high quality of earnings." This implies that

		management issued a press release indicating it was not aware of any fraud during the current year.
		the company’s management exercised little or no discretionary influence in reporting financial statement information to shareholders.
		management has used its influence in determining the dollar amounts reported on financial statements.
		income statement items reported during the current period can be expected to reflect future income levels.

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