When you are first retained to audit the financial statements of Wabash Company, you inquire whether a budget is used to control costs and expenses. The controller, James Lowe, replies that he personally prepares such a budget each year, but that he regards it as a highly confidential document. He states that you may refer to it if necessary, but he wants you to make sure that no employee of the firm sees any of the budget data. Comment on this use of a budget.

When you are first retained to audit the financial statements of Wabash Company, you inquire whether a budget is used to control costs and expenses. The controller, James Lowe, replies that he personally prepares such a budget each year, but that he regards it as a highly confidential document. He states that you may refer to it if necessary, but he wants you to make sure that no employee of the firm sees any of the budget data. Comment on this use of a budget.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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