In Case 10

question 99

Multiple Choice

In Case 10.4 (No Treasure in This Treasure Planet) , Disney overvalued net assets by capitalizing unrecoverable production costs. The lesson for the auditors in this case was to:

• A)always recalculate the client's figures regardless of how simple they appear.
• B)maintain professional skepticism when evaluating clients' estimates.
• C)always look into the background of the client before accepting an engagement.
• D)none of the above.

---

Definitions:

Reaffirmation Promise

A commitment to maintain or adhere to an agreement or obligation, especially after a challenge or dispute.

Debts Barred

Relates to debts that cannot be legally recovered due to the expiration of a statute of limitations.

Statutes Of Limitations

Laws that set the maximum time after an event within which legal proceedings may be initiated, thus limiting the duration a party can be sued or charged.

Inadequate Consideration

This term implies an agreement in which the value exchanged between two parties is significantly disproportionate, questioning the fairness of the deal.