Extract
Inbox: Letters to the Editor
Principles-Based Accounting and the Continental Vending Decision
Having been associated for over 40 years with the firm that audited Continental Vending and being well-acquainted with the three defendants, I read with great interest the article "Principles-Based Accounting" by professors Ron Mano, Matt Mouritsen, and Ryan Pace (February 2006 CPA Journal). I would like expand upon and clarify the circumstances of this unfortunate case and its implications.The article states that the auditors knew that Valley would be unable to repay the receivable carried as an asset by Continental Vending and that there was only a "relatively obscure" footnote explaining the circumstances. In fact, before signing off on the financial statements, the auditors required the debtor to pledge collateral whose value exceeded the carry...See the full content of this document
