Preparing cardozo financial statements

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Reference no: EM131724913

Eric, a newly-licensed CPA, who set up an office in South Beach, is hired by Cardozo Corporation, a publicly-traded company. The engagement letter states that Eric will use his “best efforts” to perform services for the company with due diligence, following “all applicable laws, rules, and regulations promulgated by all governing authorities, to include those rules promulgated by administrative agencies and organizations regulating his profession.” The engagement letter further states that Eric’s firm will provide general accounting, audit and tax services to the company. In the course of preparing Cardozo’s financial statements, Eric carelessly overstated net sales and profits for the current year. He also uncovered some “irregular entries” in Cardozo’s records, which he suspected to be bribes to foreign countries, but he did nothing with this information, even though it would have a material impact on the company. Does Eric have any liabilities? Discuss fully.

Reference no: EM131724913

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