1. Financial statement restatement please respond to the following: a. restateme
ID: 2372083 • Letter: 1
Question
1. Financial statement restatement please respond to the following:a. restatements of financial statements should be a red flag to lenders and investors; choose a position and support it.
b. revisions to comparative financial statements and disclosure notes.
2. Apple, Inc. please respond to the following:
a. explain whether the accounting requirements per the FASB was an improvement over the ASC 985-605 requirement and state your rationale.
b. explain how you would have advise apple to adopt the new requirements prospectively or retrospectively.
c. discuss whether or not apple fairly presented this information in their financial statement and footnotes disclosure, and state your rationale.
Thanks for your help in this matter.
Explanation / Answer
1. a. Yes, but not a big red-flag. Sometimes restatements come from reasons other than error. For example, there may be a change in GAAP that requires a company to restate its financials. However, if a company is making errors in their financial statements quite often, this may affect the reliability of the company's future and current financial statements and should be considered by investors. b. No. Revisions do not affect the actual financial position of the company. Therefore they should not be seen as a red flag. 2. a. Yes, it was an improvement because it allows more investors to more accurately determine the value of the company and allows Apple to benefit from those additional investors. b. Seeing as this would be a change in reporting entity, Apple would need to retrospectively restate its prior period statements. c. If Apple had not presented this information fairly, they would be subject to litigation and since no such thing has occurred, we can assume that their presentation was fair. Further, because this adjustment does not affect the financial position of the firm, misrepresenting it probably would not produce significant damages to investors.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.