Now, imagine that your business partner of 8 years, Mitch, is suing you for $1.5 million. Mitch claims that you have been manipulating the company accounts to pay for your new home, car, boat and vacations. You disagree. You used the accounting method you were taught in school and you are an honest person! But during Discovery, your attorney and accountant review the analysis from Mitch’s accountant and tell you that it’s possible, by applying different accounting techniques, that a jury would find in Mitch’s favor. They cannot tell you how likely that would be. Based on the video and textbook, would you agree to settle the case? Why or why not? How much would you agree to pay before you think it would be better to take your chances in court?
