Which of the following is least important when concerned about overstatement of assets through a merger?
a. Understanding the general context of the merger
b. Identifying specific analytical or documentary symptoms
c. Determining if the merger was done in accordance with GAAP
d. Studying the nature of the companies involved
b
FEEDBACK: a. Incorrect.
b. Correct. With analytical symptoms, you are comparing trends and changes. When a merger or another change in the form of a business entity occurs, you have a new entity that has no history.
c. Incorrect.
d. Incorrect.
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