Hunt is the President of Digital Printing with investors who gave capital money of P10,000,000. You hired Wanda as auditor of the firm. The investors were dissatisfied with the net income carned by the business. The business carned only P20,000 but this was before accrued expenses of P100,000 were recorded. Actually, the business was losing Hunt asked Wanda to approve the reports prepared by Gil, the accountant who was ordered to delay the recording until after the investors' meeting. If you are Wanda, what will you do? Does loyalty to Hunt hold you in his good estcem forever? Think of all the consequences that will happen after this.
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- 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a random check was carried out incidentally at one of the client's warehouses, it was found that many inventory were out of date but the client did not make adjustments.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…Mr. Mahmoud is the owner of EFG company his finance manager Miss. Bushra presented financial statements with big difference of percentage declined in terms of assets, net income and high increased of liabilities compared to the last year. Mr. Mahmoud ask Miss. Bushra to give explanation, that did not satisfy him. Mr. Mahmoud decided to hire external auditor to clear his doubts. Based on the above scenario: How auditor will plan his work to clear Mr. Mahmoud’s doubts? Suggest some recommendations on how to rectify the issues in the above cited case.b) Supreme Ventures is a manufacturer of quality home accessories and a client of youraudit firm. You are carrying out the audit of the purchases system of Supreme Ventures.The company has revenue of Ghc 12.5 million, and all the shares are owned by Mr. Addoand Mr. Tekpe, who are non-executive directors and are not involved in the day-to-dayrunning of the company.Kofi Badu is the accounts clerk who maintains all the accounting records and prepares theannual financial statements. The company uses a standard computerised accounting package.You have determined that the purchases system operates as follows:• When materials are required for production, the production manager sends ahandwritten note to the buying manager. For orders of other items, the departmentmanager or managing director sends a handwritten note to the buying manager. Thebuying manager finds a suitable supplier and raises a purchase order. The purchaseorders are signed by the managing director. Purchase orders are not…
- b) Supreme Ventures is a manufacturer of quality home accessories and a client of your audit firm. You are carrying out the audit of the purchases system of Supreme Ventures. The has revenue of Ghc 12.5 million, and all the shares are company owned by Mr. Addo and Mr. Tekpe, who are non-executive directors and are not involved in the day-to-day running of the company. Kofi Badu is the accounts clerk who maintains all the accounting records and prepares the annual financial statements. The company uses a standard computerized accounting package. You have determined that the purchases system operates as follows: • When materials are required for production, the production manager sends a handwritten note to the buying manager. For orders of other items, the department manager or managing director sends a handwritten note to the buying manager. The buying manager finds a suitable supplier and raises a purchase order. The purchase orders are signed by the managing director. Purchase orders…Assume that you are the controller of a business that provides legal services to clients. Suppose that the company has had a tough year, so the revenues have been lagging behind, based on previous years’ standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from clients instead. Would following the CEO’s advice impact the company’s accounting equation? How would reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the statement of retained earnings? Would making this reclassification change the perception that users of the financial statements would have of the company’s current year success and future year potential? Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent…Supreme Ventures is a manufacturer of quality home accessories and a client of your audit firm. You are carrying out the audit of the purchases system of Supreme Ventures. The company has revenue of Ghc 12.5 million, and all the shares are owned by Mr. Addo and Mr. Tekpe, who are non-executive directors and are not involved in the day-to-day running of the company. Kofi Badu is the accounts clerk who maintains all the accounting records and prepares the annual financial statements. The company uses a standard computerised accounting package. You have determined that the purchases system operates as follows: • When materials are required for production, the production manager sends a handwritten note to the buying manager. For orders of other items, the department manager or managing director sends a handwritten note to the buying manager. The buying manager finds a suitable supplier and raises a purchase order. The purchase orders are signed by the managing director. Purchase orders…
- there are 5 seperate scenarios by the way. Thank you! #1. Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Required1. Identify the parties potentially affected by this audit and the fee plan proposed.2. What are the ethical factors in this situation? Explain.3. Would you recommend that Thorne accept this audit fee arrangement? Why or why not?4. Describe some ethical considerations guiding your recommendation. ______________________________________________________________________________________ #2 Amy Martin is a student who plans to attend approximately four professional events a year at her college. Each event necessitates payment of $100…Assume you are the management accountant for the Foleo Group. James and Leon have called you and the CFO into a meeting to discuss concerns they have with the number of SliFones that are being returned by customers under warranty. They have pulled some numbers from the accounting system and elsewhere regarding not only the warranty costs, but also other expenses associated with the quality of the phones for the current year. The directors have handed you the below costs and asked you to look into why faulty SliFones are being returned by customers. \table[[Quality Activity,\table[[Cost of Quality],[Activity]]],[Testing phones during production processes,$25,000Mr. Mahmoud is the owner of EFG company his finance manager Miss. Bushra presented financial statements with big difference of percentage declined in terms of assets, net income and high increased of liabilities compared to the last year. Mr. Mahmoud ask Miss. Bushra to give explanation, that did not satisfy him. Mr. Mahmoud decided to hire external auditor to clear his doubts. Based on the above scenario: Write at least 3 interpretations of financial statement which the auditor may provide. Justify your answer practically
- Mr. Adil is appointed in BAC construction works as an internal auditor. One day their head of finance was on leave due to some emergency. The business has to take a timely decision otherwise; they may face a huge loss. What do you suggest to them regarding a decision? a-Internal auditor advice is significant b-A meeting should be called by the board of directors to take a decision c-Internal auditor should not considered in the decision d-Wait for the head of finance to take decisionKnowing that you have some accounting experience, your friend David has sought your adviceregarding a business that he intends purchasing. The balance sheet for the business shows total assetsof $170 000 and total liabilities of $100 000, out of which $40 000 is a bank loan. A review of thebusiness operations show that a considerable portion of the inventory is obsolete stock for which thereis limited demand. Further, many of the accounts receivable are overdue by more than 60 days. Theaccounts receivable and inventory are carried at their gross amount and cost value respectively on thebalance sheet.As you are an Accounting student, you have been asked to advise the following:a. Explain to David the form of organisation he can adopt for the business? Briefly discuss theadvantages and disadvantages of each form of organisation.b. David has a very limited understanding of the terms Assets and Liabilities. Explain to David thethree essential characteristics necessary to consider an item…"Dennis Jones, an old college friend, contacted you last week. Dennis owns several car washes, and he believes that financial statement fraud may be occurring. (He pays each car wash manager a bonus if a certain level of profits is earned and is worried that some managers are overstating profits to earn a higher bonus.)Dennisiscomingovertoday to see whether you can help him determine if his suspicions are valid. He is bringing along the financial statements for each car wash (income statements, balance sheets, and cash flow statements) for the last five years.1.What kind of financial statement analysis could you perform to help Dennis detect possible fraud?"