Boeing’s top management maintains that it did not have an obligation to reveal its problems during the first half of the year. What implications does this have for investors and analysts who follow?
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Boeing’s top management maintains that it did not have an obligation to reveal its problems during the first half of the year. What implications does this have for investors and analysts who follow?
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- A company’s management believes that substantial doubt exists that the company can meet its financial obligations as they come due for a one-year period from the issuance of its financial statements. Management is studying the plans that have been developed to avoid this problem. What two decisions must management make?A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created to address this risk. How can the company avoid disclosing that this substantial doubt exists? a. The plans must be reviewed by the chief financial officer. b. It must be probable that the plans will be implemented and it must be probable that the plans will mitigate the conditions that raised substantial doubt. c. Disclosure of the substantial doubt is required regardless of the availability of the plans. d. The plans must have been tested before the end of the financial year.Obior plc operates in a high technology industry where the external environment is dynamic and uncertain. Obior plc made a loss in the reporting period just ended and is now in the process of charging its strategy completely. The finance director has indicated to the board that, in consequence, Obior plc’s financial statements for the last reporting period will lack both predictive and confirmatory value for usersIn terms of the IFRS Framework, Obior plc will be reporting financial information which lacks the qualitative characteristic ofA. Faithful representationB. UnderstandabilityC. TimelinessD. Relevance
- Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created to address this risk. How can the company avoid disclosing that this substantial doubt exists?a. The plans must be reviewed by the chief financial officer. b. It must be probable that the plans will be implemented and it must be probable that the plans will mitigate the conditions that raised substantial doubt. c. Disclosure of the substantial doubt is required regardless of the availability of the plans. d. The plans must have been tested before the end of the financial year.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…14. Paul Schmidt, a representative for Westby Investments, is explaining how security analysts use the results of the accounting process. He states, "Analysts do not have access to all the entries that went into creating a company's financial statements. If the analyst carefully reviews the auditor's report for any instances where the financial statements deviate from the appropriate accounting principles, he can then be confident that management is not manipulating earnings." Schmidt is: correct. incorrect, because the entries that went into creating a company's financial statements are publicly available. incorrect, because management can manipulate earnings even within the confines of generally accepted accounting principles.
- 7. Obior plc operates in a high technology industry where the external environment is dynamic and uncertain. Obior plc made a loss in the reporting period just ended and is now in the process of charging its strategy completely. The finance director has indicated to the board that, in consequence, Obior plc’s financial statements for the last reporting period will lack both predictive and confirmatory value for users In terms of the IFRS Framework, Obior plc will be reporting financial information which lacks the qualitative characteristic of Faithful representation Understandability Timeliness Relevance 8. Which of the following is identified by Mintzberg as a co-ordinating mechanism which integrates organisational building blocks ? Centralisation Standardisation of work Division of work Span of workThere is typically a two- to three-month delay between the end of the reporting period and the date when an organisation's financial statements are authorised for issue to stakeholders, such as shareholders. With this delay, the information therefore starts to suffer from a lack of timeliness; it thus has reduced 'relevance'. Select one alternative: True FalseIdentify an example of a systematic risk faced by QANTAS Ltd. from the scenarios below. Select one: a. The CEO of QANTAS resigns unexpectedly. b. A lawsuit is taken out against the management for poor governance. c. The government decreases company tax for all registered corporations. d. The price of jet fuel dramatically accelerates.
- The Chief Executive Officer of Orion Enterprise has serious concerns about the company’s current or short term obligations. In a meeting with the CFO, the chief executive officer discussed his concerns, pointing out that the situation had negatively affected the company’s current ratio and acid test ratio. He sought the CFO’s advice as to whether some of the short term obligations could be reclassified as long term in order to alleviate the situation. They identified two short term obligations that could possibly bereclassified and the following actions were taken by the CFO. Note well: The company’s financial reporting date is March 31, 2019. Short Term Obligation – Wilson Finance Ltd. Orion’s short term obligation of $250,000 to Wilson Finance Ltd. becomes due on June 1, 2019. The parties reached an agreement that if Orion provides additional collateral, the obligation would be extended to June 1, 2021. The agreement was reached on May 1, 2019. The financial statements are authorized…The Ministry of Magic, the regulator of businesses, is concerned about the public financial reporting that was produced by Eeylops Owl Emporium Ltd. The Ministry was aware that the emporium had not indicated that it was discontinuing a division of its business and that for the last financial year it had not included an acquisition of a new building in its balance sheet, which it had purchased some three months before the end of the financial year. Explain why the regulator is concerned with such oversights and what the emporium is required to do in each case.An analyst assessed a company and determined the company reported a "high quality of earnings." This implies that management issued a press release indicating it was not aware of any fraud during the current year. the company’s management exercised little or no discretionary influence in reporting financial statement information to shareholders. management has used its influence in determining the dollar amounts reported on financial statements. income statement items reported during the current period can be expected to reflect future income levels.