Dorothy (an audit manager) has been assigned to the audit of tandem electric, inc. dorothy is concerned that joanne, a friend from her college days, is on the internal audit staff of tandem electric. dorothy believes she could provide services to this client in an objective manner. which statement best describes how dorothy should apply the aicpa conceptual framework approach in this situation? a. dorothy should refuse to provide services to tandem electric because no safeguards would be effective in mitigating the threat(s) to her independence. b. dorothy should not participate in the audit of tandem electric before obtaining a written waiver from her firm's general counsel. c. dorothy should consider the threats to her independence and whether safeguards may be applied that reduce the threat(s) to an acceptable level. d. dorothy should document her assessment of independence, which should include a sworn statement from joanne.

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.