another company who wants to buy Teejan too, but they are not aware that it is Majan Company. They also don't know that you were Majan's previous auditor. You are aware of Majan's problems and you know it will help them to recover profits if Majan will be the one to acquire Teejan Company instead of Home Depot. Which ethical principles will be least affected in this situation.
Q: You are the manager of an oil company, and safety/environmental issues are an important part of the…
A: The importance of safety measures and environmental regulations can be gauged from the BP oil spill…
Q: After dissolution caused by the illegal acts, fraud, corruption and etc. of the directors, trustees,…
A: Dissolution of a company is known as the process were the existing company is shut down by force of…
Q: Do you think the PointCast situation a case of pride clouding someone’s judgment or more accurately…
A: I believe he was absurd and tragically allowed his sense of self to be a burden. Given that the…
Q: A pharmaceutical company is considering investing in the development of a new drug. The company…
A: There are various measures as to evaluate the risk of an investment. Some of them are Standard…
Q: Crazy Eddie focused on making the company look extremely profitable just prior to the IPO. Why was…
A: Initial public offering: IPO or Initial Public Offering refers to the process by which a company…
Q: MBM Trading Company is a multi-disciplined Engineering, Contracting and Construction company based…
A: In this case, The auditor of the MBM Trading Company, based in Sohar, during the audit, he finds…
Q: Mr. Bader is leaving his Auditing Firm to become the Finance Director of his client company. The…
A: Auditing is an important process that every company should carry on. The financial statements may…
Q: Different businesses respond in different ways, ranging from reactive stances through to more…
A: The reactive stance manages the issues once they emerge or being encountered, without appropriate…
Q: Charging Corporation and Sparking Electrical Company are competitors in the business of electrical…
A: a) Calculation of Offered Amount Offered amount = Market Capitalization x (1 + takeover premium) =…
Q: : This is a continuation of Kate was a little worried about some of the practices of Fred Abbott,…
A: Meaning of Journal entries: A journal entry is a record of the business transactions in the…
Q: Hello I don't understand what this question? Many financial managers and corporate officers have…
A: I do not agree with this statement because this lacks a universal application. Good and bad people…
Q: ppose you were a CPA and you had invested in IBM when IBM was not one of your firm's clients. Two…
A: In the Present case, SEC was concerned for some of the accountants violating the rule of the…
Q: Unethical acts are generally committed by unethical people. What are some things companies can do to…
A: The companies can ensure the ethical behavior of the employees by: Creating a code of ethics,…
Q: Sometimes the government will step in when they feel the need to encourage competition in a…
A: The government will step in when they feel the need to encourage competition in a particular…
Q: Sometimes the management of a target firms fights a take over attempt even when that attempt appears…
A: A target firm is a firm that the acquiring company acquires either in the process of merger or…
Q: You are the founder of IGRO, an Internet firm that delivers groceries. a. Give an example of an…
A: (a.) IDIOSYNCRATIC RISK- Idiosyncratic risk may be a style of investment risk that's endemic to a…
Q: Charles Corporation and Steven Company are competitors in the business of electrical components…
A: We will value the company via the free cash to equity method and then compare with the price offered…
Q: (a) Who are the stakeholders in this situation? (b) Are the president's motives and actions ethical?…
A: Ethics: Ethics in business is a much debated yet less followed topic. Every business has to…
Q: The shareholder of Al-Karam wants to maximize his profits by selling his goods in the larger…
A: The question is related to make analysis of the situation and possible problem that might occcur for…
Q: ntroller and financial vice president. Vice President: If we sell the Casino Knights Division, it…
A: Solution-(a) It appears that the sale of the Casino Knights Division will be qualified as a…
Q: Most managers have no difficulty avoiding blatantly dishonest actions. But sometimes there are gray…
A: Corporate ethical dilemma is a situation where a company needs to choose between a morality and…
Q: You have just been hired as a consultant to Tangier Industries, a newly formed company. The company…
A: LIFO and FIFO:
Q: One effect of the recent globalisation of business is that it is now easier for owners and managers…
A: In business, globalization refers to the companies operating internationally or on a global scale.…
Q: Which of the following is incorrect: Options: a) The Market for Corporate Control is an…
A: Correct: a) The market of corporate control is one of the key factors for the shareholders and…
Q: In her book The Seven Signs of Ethical Collapse, Jennings explains: “When an organization collapses…
A: Given information is: In her book The Seven Signs of Ethical Collapse, Jennings explains: “When an…
Q: 4. Which of the following statements are true regarding Donato's possible response to the ethical…
A: Ethical Conflict- Ethical conflicts occur when persons are confronted with a conflict between…
Q: Simpson Corp. is an entertainment firm that derives approximately 30% of its income from the Casino…
A: As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the answer…
Q: Jones is a purchasing officer for Smith & Co. He buys exclusively from Brown even though other…
A: Solution: Conflict of interest is a situation when a person is in a position to derive personal…
Q: Costco has a policy of not hiring business school graduates because it wants employees to start at…
A: Business sBusiness schoolBusiness school graduates are usually students who have completed their…
Q: anti-monopoly law
A: Upon entry of a competitor in which only one company previously had access to, the lwready existing…
Q: Your business may be at risk if: Select one: a. All of these b. An important contract does not…
A: Risk is a condition or circumstance where it can hamper the business of the company or may give an…
Q: The manager of Q Corporation is recommendir the closure of Branch B in order to eliminate its
A: Answer: We do not agree with manager, as if Branch B is closed Net operating income for company will…
Q: Coast Corporation's research and development department has a a project to develop a new product…
A: Ethical issues occur when a given decision, scenario or activity creates a conflict with a society’s…
Q: Which of the following are true statements on the principal-agent problem between corporate managers…
A: The principal-agent problem occurs when there are conflicts of interest between the principal and…
Q: Requirements 1. Which advantage of incorporating is most applicable? What are other advantages of…
A: Definition: Corporation: A corporation is a form of business in which the legal entity of the…
Q: You need to go the office of DTI if you will register your corporation. true or false?
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: 1.Why did the strategic plans adopted by companies like Level 3, Global Crossing, and 360 Networks…
A: Note: I am providing the solution of the first three parts. Please repost the remaining parts…
Q: Ethics Codes help companies to keep a standardized way to take decisions else the decision can be…
A: Unethical behaviour is described as activities that violate societal norms or are deemed…
Q: Ms. Sarah is an auditor without any staff, and since then she is doing her works without planning.…
A: 1) While doing her audit she should make sure that she completes one audit before starting her…
Q: Defamation is one of the most critical problems that most organization is facing. Suppose you are…
A: Defamation is the communication of false information about an organization that adversely affects…
Q: Curtis Company is facing a potential lawsuit. Curtis’s lawyers think that it is reasonably possible…
A: Contingent liability: It is a potential liability of a company that depends on a future event. The…
Q: Design an specific doable audit program for her clients to make them satisfied.
A: Given case is: Ms. Sarah is an auditor without any staff, and since then she is doing her works…
Q: The following are lessons (from previous derivative mishaps) for non-financial corporations except…
A: Answer is option 4. The following are lessons (from previous derivative mishaps) for non-financial…
Step by step
Solved in 4 steps
- You have been presented with the following draft financial information about Bata Ltd, a very successful company that develops and licenses specialist computer software and hardware. Its noncurrent assets mainly consist of property, computer hardware and investments, and there have been additions to these during the year. The company is experiencing increasing competition from rival companies, most of which specialize in hardware or software, but not both. There is pressure to advertise and to cut prices. You are the audit manager. You are planning the audit and are conducting a preliminary analytical review and associated risk analysis for this client for the year ended 31 July 2019. You have been provided with a summarized draft income statement which has been produced very quickly and certain accounting ratios and percentages. You have been informed that the company accounts for research and development costs in accordance with IAS 38 Intangible Assets. Required: (i) Based on the…The auditor worked for this client for years. But before accepting or continuing with the client, What are the reasons the auditor or audit firm should or should not retain this existing client this time around using the information below about the client? What risks could the client, its business, and its environment pose to the auditor or audit firm? The client: Although client cash flows have been stable, the disruption caused by the 2020 global pandemic made it difficult for retail lessors to pay their rent on time. Due to the company's tenant-friendly approach, retail clients were allowed to renegotiate their lease and temporarily pause rent payments between June 2020 and July 2021, shifting those payments to the last 12 months. Most of these leases will expire in the next two years, including all retail companies unable to pay their rent. However, they estimate that they will receive all the lost cash flow from these tenants within a couple of years. Currently, the company is a…You are an auditor in Andy & Gary Associates, a mid-tier audit firm. You are deciding whether to continue with the audit engagement of Neville Ltd. Since the previous audit, the company has listed on the Australian Securities Exchange which requires it to comply with additional reporting regulations. Due to rapid growth, Neville Ltd is financially stretched and its accounting systems are struggling to cope with the growth in the business. You recently read an article in the Australian Financial Review, which stated that Neville Ltd is currently under investigation by the Australian Taxation Office (ATO) for alleged failure to pay the appropriate amount of Pay As You Go (PAYG) tax on their payroll. Required: Explain four (4) matters you should consider before continuing with the audit engagement at Neville Ltd.
- ). You have recently been approached by a retail company, Canning Limited to provide audit and tax services. You have contacted the outgoing auditor to request for any matters which might prevent you from accepting the assignment. This request has been followed up with phone calls with no response received from the outgoing firm. You held a discussion with the company’s management team and you became aware that the last auditor resigned due to dispute over unpaid fees from the last audit assignment. The Management of the Company were of the view that the previous auditors were too materialistic. Required: Identify the professional issues that needs to be dealt with before accepting the audit assignmentPhillips CPA Firm is auditing the accounts of Tojo Enterprises, Inc., a national distributor of kitchen appliances. After reviewing the minutes of board of directors meetings as well as recent SEC filings, Phillips CPA firm have noted that key executives are extremely close to achieving a substantial bonus if the firm's stock price achieves a certain level in the market. Based on this finding, what might Phillips CPA Firm decide to do? O Phillips CPA Firm are likely to audit competing companies within the same industry as a basis for comparison. O Phillips CPA Firm are likely to assess control risk as low on the premise that management's desire to achieve stock price forecasts will increase fraud risk. O Phillips CPA Firm are likely to assume fraud risk is high, due to senior management's proximity to achieving certain desired stock prices. O None of these answer choices are correct.Auditor as Guarantor. Your neighbor, Loot Starkin, invited you to lunch yesterday. Sureenough, it was no “free lunch” because Loot wanted to discuss the annual report of DodgeCorporation. He owns Dodge stock and just received the annual report. Loot says, “Ourauditors prepared the audited financial statements and gave an unqualified opinion, so myinvestment must be safe.”Required:What misconceptions does Loot Starkin seem to have about the auditor’s role with respectto Dodge Corporation
- You are an auditor at a public accounting firm. You and your team are entrusted by Partner to handle clients engaged in the home appliance retail business. Your client is a company that has go public. The client's financial statement in the previous year reported a loss, however this year reported a material gain. After you check, it turns out that the client reports income that is not much different from the previous year, however, there can be a profit due to the decrease in Cost of Goods Sold (COGS). The client reports that the amount of inventory has increased drastically, even though sales have not increased and the account payable balance is almost the same as in previous years, this has led to suspicion of a double counting scheme in the client's inventory. In addition, when a random check was carried out incidentally at one of the client's warehouses, it was found that many inventory were out of date but the client did not make adjustments. Question:a. If you wanted to perform…Luxwell, a Copenhagen, Denmark company that manufactures security devices, has contacted Christian Jespersen, certified auditor, to submit a proposal to do a financial statement audit. Luxwell was a bit taken aback when saw the cost of the financial audit, even though the fees were about average for an audit of a company Luxwell's size. The board of directors determined that the company could not afford to pay the price.Required: 1. Discuss the alternatives to having a financial statement audit2. What should Luxwell consider when choosing the assurance service?Mr. Salim is the owner of an audit firm who audit the financial statements of the companies by charging fee. Lulu hypermarket is one of their old clients. Last month lulu hypermarket distributed discount coupon to their customers and it was a coincident that external auditors were also there, and they also got some coupons. Which of the following threat do you think can arise in this situation? a. Familiarity threat b. None of the options c. Self-interest threat d. Self-review threat
- Mr. Ahmed recently joined an audit firm. The company has decided to send him for the audit of Oman cement LLC. If we see his previous experience, he worked with Oman cement for 5 years. There is a possible risk of _________________. a. Intimidating threat b. None of the options c. Self-interest threat d. Familiarity threatYour client is a company that produces high-quality palm oil (CPO) and palm kernel products. You find that the client has a capital deficiency arising from losses that occurred during the current year and several previous years. Besides that, there are many long-term liabilities that will mature in the next year, resulting in the client's current liabilities far exceeding their current assets. During the audit you did not find any material misstatements, the client management is very cooperative, easy to communicate, the client has reported the financial statements according to applicable standards, and also the sustainability report. According above situation, what kind of audit opinion, the auditor should provide to the client? What kinds of auditor independents’ report will auditor provide (standard or modified)?You are currently planning the audit of ABC company. You have audited ABC for the previous five years. ABC is a technology company that is currently going through an IPO. Because of its inexperience complying with SOX 404 requirements, ABC still has very poor internal controls overall, although controls for sales are strong and have been found to operate effectively during interim testing. Most of its accounting procedures involve complex accounting and the heavy use of estimates. ABC is frequently featured in the financial press. Pre-tax income for the current year under audit is $10,000,000. ABC's largest and most challenging account balances are sales revenue ($143,000,000) and research and development expense ($25,000,000). Based on the information above, tolerable misstatement/performance materiality for R&D expense would be: 50% of overall/planning materiality 75% of overall/planning materiality 50% of the R&D account balance 75% of the R&D account balance Based on the…