Question

Assume that your firm was auditing General Electric in 2000 and was recommending an adjustment to its financial statements that reduced net income. Based on the fees paid to your firm in 2000, what incentive(s) might your firm consider in insisting upon this adjustment? How would your firm's incentive(s) differ after 2004?

Answer 1

One further development which will influence the fees reported by General Electric(GE) is that thedisclosure needs enforced by the protection and exchange Commission (SEC) . SECadopted needs that registrants disclose the assorted kinds of fees paid to its monetarystatement auditors; underneath the initial steerage, audit fees enclosed fees purchased the annualfinancial statement audit and people purchased the reviews of quarterly financial plans. Auditrelated fees includes different fees that may be fairly associated with the preceding services yetas fees purchased due diligence on mergers and acquisitions and costs purchased audit services on

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