The purpose of this memorandum is to document the procedures and requirements for Audit case 2:
Computone Corporation. This case was adapted from article “Computone Corporation: An
Instructional Case in Earnings Management and Revenue Recognition” by H. Lynn Stallworth and
Robert L. Braun. The American Accounting Association holds the copyright to the case, but extends
duplication permission for use in courses of instruction. All other uses are prohibited without the
explicit permission of AAA.
You will find all the background information required within this memo, however, you will need to
reference external materials regarding auditing standards, SEC staff bulletins and the SarbanesOxley
Act of 2002 (no links are provided, you must obtain them yourselves). The final product of this case
will be a memorandum addressing your answers to the questions found herein. The memo should be
in a concise and clear format, explaining not only your conclusions but also how you reached those
conclusions
