Description
Overstated income (overstated revenues, understated expenses or a combination) is an area of concern to the SEC. Go to http://www.sec.gov/divisions/enforce/friactions.shtml and locate an enforcement release where there is a discussion of overstated income and issues with the audit or auditor. Prepare a memo to explain why the SEC had an issue with income overstatement and how the auditor could have done a better job.

Explanation & Answer

Attached.
(Surname 1)
Student
Professor
Course Details
Date of Submission
Overstated Income
Overstate income includes understated balances and overstated revenues. The overstated
income is one of the major issues of concern to the Securities and Exchange Commission (SEC)
in respect public interests. Notably, an overstated revenue includes a report having a greater
balance sheet more than intended while the understated balances involve a report with lesser
balance than expected. According to McCrary (2009), additional re...
