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auditing
Question 1

Incentives:
Financial pressures from changes in the market and industry intense competition (national, regional, local) under cut prices from municipalities that could offer lower prices by using tax revenue. Pressure to meet earnings expectations Stock ownership benefits Retirement benefits Performance based bonuses Maintain growing stock price Maintain industry leadership Maintain reputation

Opportunities:
Able to use a lot of estimates in depreciation of PPE (over 1/2 of assets) Accounting firm (Arthur Andersen) thought of Waste Management as a crown jewel and would be lenient to keep from losing their account, working together since before 1971. Lot of former Andersen employees were working at Waste Management CFO and CAOs all former Anderson auditors Arthur Anderson hadn’t forced them to change yet Arthur Andersons action steps- working together to cover up past fraud with new fraud f. g. Top executives working together in the fraud Netting and geography.

Attitudes:
If their auditor was approving the accounting treatment of certain items, it must have been correct. These entries were needed to stay competitive keep their jobs and status in community. Keep shareholders happy and willing to invest more Review Waste Managements Consolidated Balance Sheet as of December 31, 1996. Identify accounts whose balances were likely based on significant management estimation techniques. Describer the reasons why estimates were required for each of the accounts identified.

Question 2

Accounts Receivable Waste Management must determine an allowance for bad debt, which requires judgment. This may be difficult to determine based on past experience as the market place is changing. In addition, general economic conditions must be considered in customer’s ability to pay. Employee Receivables this account requires judgment based on the willingness of employees to pay. It is unclear if this payment is handled by direct deposit, or like

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