Which of the following is usually not helpful for determining the existence of a

Question

Which of the following is usually not helpful for determining the existence of a merger fraud?

Question 2 options:

Understanding the context of the merger.

Determining if the merger was done in accordance with GAAP.

None of the above

Observing analytical symptoms.

Comparing after-merger book values with corresponding pre-merger book values

Understanding the context of the merger.

Determining if the merger was done in accordance with GAAP.

None of the above

Observing analytical symptoms.

Comparing after-merger book values with corresponding pre-merger book values

Explanation / Answer

ANALYTICAL SYMPTOMS ARE USUALLY NOT HELPFUL FOR DETERMINING THE EXISTENCE OF A MERGER FRAUD. WITH THE ANALYTICAL SYMPTOMS,YOU ARE COMPARING THE TRENDS AND CHANGES,WHEN A MERGER OR ANOTHER CHANGE IN THE FORM OF A BUSINEES ENTITY OCCURS, YOU HAVE A NEW ENTITY THAT HAS NO HISTORY. AS A RESULT YOU USUALLY CANNOT LOOK FOR EITHER CHANGES IN ACCOUNT BALANCE OR FINANCIAL STATEMENT RELATIONSHIPS.

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