Do you think that a lender, in general, in arranging so-called “structured financing” has a responsibility to ensure that its clients account for the financing in an appropriate fashion, or is this the responsibility of the client and its auditor?

Critical Thinking

Who are the stakeholders in this situation?

Do you think that a lender, in general, in arranging so-called “structured financing” has a responsibility to ensure that its clients account for the financing in an appropriate fashion, or is this the responsibility of the client and its auditor?

What effect did the fact that the written record did not disclose all characteristics of the transaction probably have on the auditor’s ability to evaluate the accounting treatment of this transaction?

Why might a company wish to conceal the terms of a financing arrangement from the capital markets?Is this appropriate?