Sarah Is an Audit Senior with Childs, Maxwell and Weaver

question 6

Short Answer

Sarah is an audit senior with Childs, Maxwell and Weaver, LLP.Sarah specializes in auditing loan loss reserve for financial institution clients.This current year she has noticed that two of her financial institutions in town have written loans off to a loan customer, Mr.T (fictional name to protect the guilty).Mr.T is well known in town as a highly successful real estate developer and businessman with many different business dealings.As Sarah is auditing on her third financial institution in town, she notices that the bank has loans of $3.5 million outstanding to Mr.T.The current loan loss reserve could not cover the losses on Mr.T's loans.Sarah has recommended a significant increase to the loan loss reserve account.The client will not discuss increasing the loan loss reserve.Ms.Childs, senior partner on the audit, wants to know how the audit firm can justify the increase loan loss reserve account.What can and should Sarah disclose about Mr.T?

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Definitions:

Extemporaneous

Speaking or performing with little or no preparation, often characterized by spontaneity and naturalness.

Impromptu

Impromptu refers to something done without being planned, prepared, or rehearsed, often characterized by spontaneity.

Reading

The process of interpreting and understanding written or printed material, a fundamental skill for acquiring knowledge and information.

Extemporaneous Presentations

Speeches or presentations delivered without full prior preparation, often with some notes or an outline.