You Are Auditing Green Corporation for the Calendar Year 2012

question 25

Essay

You are auditing Green Corporation for the calendar year 2012.Among other items related to the audit,Green is being sued for personal injury resulting from the malfunction of one of its products.Sue Ewe initiated the lawsuit in September 2012.Management and the company's outside legal counsel estimated the loss from the suit to be approximately $250,000.This amount is accrued and properly disclosed in the footnotes of the financial statements.You have no reason to believe that the estimate is inaccurate.You completed your audit and dated your report March 2,2013.The financial statements were issued on March 14,2013.On March 20,2013,you read in a national business periodical that the jury in the trial awarded Sue Ewe $1.5 million.
Required:
Discuss the nature of these events and what responsibility,if any,you have regarding the news of March 20,2013.

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Definitions:

Parietal

Refers to the parietal lobe in the brain, which processes sensory information such as touch, temperature, and pain.

Higher Mental Activity

Complex cognitive processes including thinking, reasoning, decision-making, and problem-solving beyond simple perception and memory.

Cerebrum

The largest part of the brain, responsible for voluntary actions, speech, thoughts, memory, and sensory processing.

Corpus Callosum

A thick band of nerve fibers that divides the cerebral cortex lobes into left and right hemispheres, facilitating communication between the two sides of the brain.