12) Yakov is an executive of Fit Corp., a chain of fitness clubs. For years, he successfully illegal and misleading accounting practices, but eventually, he was exposed and punished with a jail sentence under the A) Celler-Kefauver B) Glass-Steagall C) Dodd-Frank D) Gramm-Leach-Bliley E) Sarbanes-Oxley Act.
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- Mr. Stanhope has an MBA degree from Stanford University and has successfully operated a business for 18 years. The revenue agent who audited Mr. Stanhope's Form 1040 discovered a glaring error resulting in a $16,200 underpayment of tax. When questioned by the revenue agent about the error, Mr. Stanhope just shrugged and offered no logical explanation. Required: a. If the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence. b. Is Mr. Stanhope's level of education and business experience likely to be a factor considered by the revenue agent in determining negligence? Complete this question by entering your answers in the tabs below. Required A Required B X Answer is complete but not entirely correct. If the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence. Accuracy-related penalty $ 3,440 X Required A Required B >Magnum, a well-known private investigator, has a very unhappy client, C, who does not like her (Magnum’s) work because he was hoping for a different kind of truth. C refuses to pay and calls every TV station in town saying “Magnum is a liar and a crook!” The story gets lots of coverage. Magnum sues and wins – $100,000, her fee as charged; $400,000 compensatory damages for defamation; and $500,000 punitive damages. For the year in which she collects this $1M, Magnum will have to include in her gross income $____. Why is that the correct amountSarah Keene, CPA, is the newly hired controller for Plexicon, Inc., which is a publicly traded corporation. Ms. Keene's first job with Plexicon was the review of the company's accounting practices on deferred income taxes. In doing her review, she noted differences between tax and book depreciation methods that permitted Plexicon to realize a sizable deferred tax liability on its balance sheet. As a result, Plexicon paid very little in income taxes at that time.\\n\\n Keene also discovered that Plexicon has an explicit policy of selling off plant assets before they reversed in the deferred tax liability account. This policy, coupled with the rapid expansion of its plant asset base, allowed Plexicon to "defer" all income taxes payable for several years, even though it always has reported positive earnings and an increasing EPS. Keene checked with the legal department and found the policy to be legal, but she's uncomfortable with the ethics of it.\\n\\nRequired:\\n\\nWhy would Plexicon…
- Mr. Stanhope has an MBA degree from Stanford University and has successfully operated a business for 18 years. The revenue agent who audited Mr. Stanhope's Form 1040 discovered a glaring error resulting in a $17,500 underpayment of tax. When questioned by the revenue agent about the error, Mr. Stanhope just shrugged and offered no logical explanation. Required: a. If the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence. b. Is Mr. Stanhope's level of education and business experience likely to be a factor considered by the revenue agent in determining negligence? Complete this question by entering your answers in the tabs below. Required A Required B If the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence. Accuracy-related penaltyThe revenue agent who audited Ms. Hsui's Form 1040 discovered a $15,500 deduction that wasn't allowed by the tax law. The improper deduction reduced Ms. Hsui's tax by $5,053. The total tax deficiency for the year under audit was $6,510. Required: a. Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in preparing the tax return. b. Compute the maximum penalty if the agent concludes that the improper deduction represented Ms. Hsui's deliberate attempt to cheat the government by underpaying tax. Complete this question by entering your answers in the tabs below. Required A Required B Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in preparing the tax return. Note: Round your answer to the nearest whole dollar amount. Negligence penalty s 291 Ⓡ Required A Required B >Ernest and Young cleared Wirecard’s reputation back in 2008 and BaFin, the German financial regulator, continually supports Wirecard. Critics of Wirecard were investigated by BaFin. Suggest course of action (s) to prevent discrepancies in the financial resultsreporting to ensure that such scandal will not arise in the near future. Make sure your answers in paragraph not less than 500 words. Thank you
- 4SEBI monitors the activities of companies listed on stock exchange regularly to minimize the effect of malpractices. In spite of regular supervision, many companies have misrepresented their financial statements in a lucrative manner, and later on investors had to sacrifice their hard earned money. Comment on the preventive measures taken by SEBI after YES Bank case in 2020.The following paragraphs describe fraudulent accounting committed by the company Rite-Aid in 1999. After reading the paragraphs, list the journal entries you think Rite-Aid would have used to do what is described here. You will have to make an educated guess as to what journal entries the company would use to cover up the fraud. In the fourth quarter of FY 1999, Rite Aid prematurely recognized $17 million relating to a litigation settlement with a vendor. Rite Aid should not have recognized this sum in that period because the settlement offer was expressly contingent upon the execution of a formal settlement agreement which did not take place until May 20, 1999. Moreover, the litigation settlement was also contingent upon the execution of a purchasing agreement that was not finalized until May 18, 1999. Both of these contingencies were expressly stated in the February 26, 1999 letter of intent signed by Grass.
- Read the facts of the case in Problem 2-26 to become familiar withthe fraud involving Koss Corporation. From the company’s October 7,2009, proxy statement (Def 14A filing with the SEC), we know the followingfacts about the company’s audit committee and its members:Thomas L. Doerr 65, has been a director of the company since 1987. In1972, Mr. Doerr co-founded Leeson Electric Corporation and served asits president and CEO until 1982. The company manufactures industrialelectric motors. In 1983, Mr. Doerr incorporated Doerr Corporation asa holding company for the purpose of acquiring established companiesinvolved in distributing products to industrial and commercial markets.Currently, Mr. Doerr serves as president of Doerr Corporation.Mr. Doerr owns no stock in Koss Corporation and received $24,000 incash compensation during 2009 to serve on the audit committee.Lawrence S. Mattson 77, has been a director of the company since 1978.Mr. Mattson is the retired president of Oster company, a…Green, a police officer, suspected that Brown was engaged in illegal racketeering activities. To obtain evidence of Brown’s illegal conduct, Green place a bug in Brown’s home without a warrant. Green may have violated which of Brown’s constitutional rights? A. Fourteenth Amendments rights. B. Fifth Amendments rights. C. Sixth Amendments rights. D. Fourth Amendments rights.Murals-R-Us Corporation is being sued for $12 million for age discrimination. The company lawyers believe it is probable the company will have to pay the $12 million on the lawsuit. How would the Murals-R-Us accountants account for this lawsuit?