Jim Smith has worked for the ABC Insurance Company for the past twen.pdf
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Jim Smith has worked for the ABC Insurance Company for the past twenty-three years. Jim graduated with a top-notch accounting degree and he also has his MBA. Bar none, Jim is considered by everyone in his organization to be a brilliant accountant. At issue is that Jim\'s brilliance may be coupled with just a little too much \"creativity\" when one considers his approach to maximizing the company\'s profits. At the end of every quarter, Jim calls up the supervisors of each of ABC\'s insurance branches, and asks them to estimate their outstanding insurance claims. These insurance claims represent money that the company very likely owes its customers – i.e., claims are estimates of money owed at the end of the quarter to ABC\'s customers who are likely to file a claim in the near future, but who have not yet done so (the total money owed - but still outstanding - is referred to as a \"claims lag\", since there is a lag from the date on which an insurable event has occurred to that point in time at which ABC has become aware that a customer has filed a valid claim). For instance, based on historical experience, at the end of each quarter, Division 1 of ABC Company estimates that 20% of all claims for that quarter are still outstanding (i.e., an insurable event has occurred, but has not yet been reported to Division 1). This is the number (20%) reported to Jim. Being the \"brilliant\" accountant that he is, and in light of his sheer eagerness to maximize profits for the quarter (and because his quarterly bonus is based on each quarter\'s profits!), Jim reduces the outstanding claims reported by all of ABC\'s insurance divisions by 10%. In doing so, Jim has effectively reduced the company\'s quarterly claims expenses by this same 10% --- and voila! -- Jim has also managed a creative increase in his own quarterly bonus. As you might guess, Jim sees nothing wrong in further reducing the divisions\' company claims estimates, reasoning: \"Look...they\'re all a bunch of estimates anyhow!\" Jim further opines: \"Besides, I have a duty to this company and to its stockholders - and that is to maximize profits!\" Consider this situation from a virtue ethics perspective. What virtues are at stake? Solution Virtue ethics emphasises on an individual\'s character as the primary key of ethical thinking. The stress is on morals and character and moral behaviour. Virtues are postivie traits and morals and qualities which are morally good. From a virtue ethics perspective, Jim is presenting false numbers on a quarterly numbers. This may also be considered a case of fudging and misrepresenting the data. In other words Jim can also be said to be lying. Jim is consciously under-reporting the outstanding claims numbers every quarter, to increase his bonus. Jim says that he his doing a favor to the company and shareholders, but in reality he is only concerned about his bonus and workd with the objective of maximizing his bonus. The virtues at stake are: (1) honesty and .
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From Yizhou HuangTo Professor BoyerSubject FRAUD INVESTIGATI.docx
From Yizhou Huang
To: Professor Boyer
Subject: FRAUD INVESTIGATION: MOUNTAIN SPORTING GOODS
10/16/2017
Fraud refers to deliberate efforts by a party to conceal information to other parties for his/her benefits to the detriment/loss of the party to whom the information is being hidden. Not many organizations’ management will readily accept fraud has occurred. As a result, not may fraud cases will be detected especially by outsiders.
At onset, I am aware that Mountain Sporting Goods, and I particular Pawn shop will not be an exception to the above. As such, my findings may not be conclusive of all the fraud which has occurred in Pawn Shop or Mountain Sporting Goods.
It is the duty of the management to come up with plans and programs which will safeguard the organizations assets, deter and detect fraud, and ensure the integrity of its accounting records. In the Pawn shop scenario, I am aware that this may be a red flag to check in my investigations. Since the members of the company were of the opinion that the business was not going well, I decided to approach the engagement with a free mind but cognizant of the fact that it is possible they are right.
No organization is safe from fraud regardless of its size. Therefore, an organization should create a fraud risk assessment plan and ensure that proper internal controls are in place. Mountain Sporting Goods were supposed to have one. For this to work, the owners or management must fully understand the business and the environment in which it is working in.
However, when the proprietor, JD, the family did not understand the business and eventually entrusted their friend TW to manage and run the business.
Pawn shop management was expected to put in place controls to provide reasonable assurance regarding the achievement of the objective, effectiveness and efficiency of operations reliability of financial reports.
Phase I: red flags, fraud hypothesis:
1. Misappropriation and misuse of company assets. This may include assets such as cash, data and property. This may include theft of resources and assets.
2. Financial fraud schemes.
3. Corruption. This is done through bribery in order to ensure a person with information does not disclose it, extortion by a person with influence over another and conflict of interest.
Red flags:
1. Tw is not a owner manage business: college student, not efficiency
2. sales are increasing each year, but NI is going down significantly, not making projection. Company has the ability to generate revenue, but NI decrease
3. Pawn shop sales for the year is really small- not the growth area, failure of the business
4. Inventory for the Pawn shop is not on the book (ending inventory that was not redeemed should recorded)- inflating sales, purchases , sales will not recorded on the book(pawn), inventory not on the book, loan repayment by cash—workman can take home some cash, inventory… no traces on sales, cash, inventory
Loan(pawn) GAAP
Purchase 100 Inventory ...
PPP Second Draw 2021 and First Round Forgiveness Review
PPP Round 2 and PPP Round 1 Forgiveness Review
An analysis of the newly passed laws revitalizing the Paycheck Protection Program and approving a Second Draw.
(c) Donaldson Legal Counseling PLLC 2021 All Rights Reserved
Current information as of 1/7/2021
This is not legal advice. For legal advising consult an attorney.
Running head Cardinal Wholesalers’ Case .docx
Running head: Cardinal Wholesalers’ Case 1
Cardinal Wholesalers’ Case 5
Cardinal Wholesalers’ Case
Cardinal Wholesalers’ Case
Assignment 1
It is important to understand the factors that influence people to commit fraud. The three factors commonly associated with fraud include opportunity, pressure, and rationalization. Bill Carter and Mike Smith defrauded Cardinal Wholesalers for years until they were apprehended. Evaluation of Bill Carter and Mike Smith under the fraud triangle will help determine the factors that influenced their decision to commit fraud.
Bill Carter
Bill Carter had just been fired for visiting inappropriate websites while at the company. Bill Carter felt that he was fired unfairly since other employees also visited such sites yet they were never fired. Based on such, Bill Carter could use rationalization in justifying the reason why he decided to defraud the company. Under rationalization, Bill could also justify the reason why he defrauded the company since it was still making profits. Since their fraud acts did not negatively influence the profits of the company, Bill Carter could justify his acts (Dellaportas, 2013).
The second factor as per the fraud triangle that influenced Carter`s decision to defraud the company was due to financial pressure. After being fired, Bill Carter did not have a source of income yet he was expected to $38,000 in debts plus school fee for his son who attended an expensive college. Bill was losing his patience after unsuccessfully looking for employment and it was then he knew that he had to look for an option to pay off his bills and to be able to survive, thus leading to his thoughts on defrauding his former company (Dellaportas, 2013).
The third aspect that drove Bill Carter to committing fraud was the opportunity. Bill was Mike1`s friend who well knew that he had been fired unfairly. Due to the sympathy that Mike had for Bill, Bill well knew that he would help him in committing fraud (Dellaportas, 2013).
Mike Smith
After Bill Carter was fired, Mike Smith took Carter’s position as the head of purchases. One of the factors that influenced Smith`s decision to defraud the company was the opportunity. Since he was the head of purchases, he had the opportunity to approve of all the transactions that were being made on behalf of the company, which meant that he would make bogus transactions without him being noticed. In addition, Carter knew of this opportunity, which made it easier for him to convince Carter to be his accomplice (Dellaportas, 2013).
The second factor as per the fraud triangle that led to Mike Smith defrauding his company was the financial pressure that he was under. Despite being young and single, Mike smith had accumulated debt as a result of his expensive lifestyle. Mike Smith loved expensive things and was also addicted to gambling, which affected his financial stability. As a result, Mike Smith was under financia.
Bad Debts
Bad debt, in an accounting environment, represents revenue from sales that were purchased on credit and/or notes receivable that have proven uncollectible
ACCT323 Final exam1.Which of the following represents .docx
ACCT323 Final exam
1.
Which of the following represents the largest percentage of state tax revenue?
Sales tax
Individual income tax
Other
Property tax
None of these
2.
Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?
Convenience
Economy
Certainty
Equity
None of these
3.
The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of _______.
A sin tax to discourage undesirable behavior
A government fine
An earmarked tax
Both A and C
None of these
4.
If Susie earns $750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2012?
$231,639.50
$262,500.00
$239,261.00
$236,435.00
None of these
5.
Which of the following is not considered a primary authority?
Tax Court case.
Regulation.
Revenue Ruling.
Tax service.
None of these.
6.
Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?
rev: 03_21_2013_QC_28372
Filing status.
Taxpayer's gross income.
Taxpayer's occupation.
Taxpayer's age.
None of these.
7
.
Corporations are required to file a tax return only if their taxable income is greater than:
$0.
$1,000.
$600.
$750.
None of these. Corporations are always required to file a tax return.
8.
Lavonda discovered that the U.S. Circuit Court of Appeals for the Federal Circuit has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:
Tax Court only.
U.S. Court of Federal Claims only.
U.S. District Court only.
Tax Court or the U.S. District Court.
Tax Court or the U.S. Court of Federal Claims.
9.
Jason's employer pays year-end bonuses each year on December 31. Jason, a cash basis taxpayer, would prefer to not pay tax on his bonus this year (and actually would prefer his daughter to pay tax on the bonus). So, he leaves town on December 31, 2011 and has his daughter, Julie, pick up his check on January 2nd, 2012. Who reports the income and when?
Julie in 2011
Julie in 2012
Jason in 2011
Jason in 2012
None of these
Top of Form
10.
Investing in municipal bonds to avoid paying tax on interest earned and to earn a higher after-tax yield is an example of:
conversion
tax evasion
timing
income shifting
None of these
Bottom of Form
11.
Which of the following increases the benefits of income deferral?
increasing tax rates
smaller after-tax rate of return
larger after-tax rate of return
smaller magnitude of transactions
None of these
12.
Which of the following is an example of the timing strategy?
A corporation paying its shareholders a $20,000 dividend
A parent employing her child in the family business
A taxpayer gifting stock to his children
A cash-basis busi.
Recommended
From Yizhou HuangTo Professor BoyerSubject FRAUD INVESTIGATI.docx
From Yizhou Huang
To: Professor Boyer
Subject: FRAUD INVESTIGATION: MOUNTAIN SPORTING GOODS
10/16/2017
Fraud refers to deliberate efforts by a party to conceal information to other parties for his/her benefits to the detriment/loss of the party to whom the information is being hidden. Not many organizations’ management will readily accept fraud has occurred. As a result, not may fraud cases will be detected especially by outsiders.
At onset, I am aware that Mountain Sporting Goods, and I particular Pawn shop will not be an exception to the above. As such, my findings may not be conclusive of all the fraud which has occurred in Pawn Shop or Mountain Sporting Goods.
It is the duty of the management to come up with plans and programs which will safeguard the organizations assets, deter and detect fraud, and ensure the integrity of its accounting records. In the Pawn shop scenario, I am aware that this may be a red flag to check in my investigations. Since the members of the company were of the opinion that the business was not going well, I decided to approach the engagement with a free mind but cognizant of the fact that it is possible they are right.
No organization is safe from fraud regardless of its size. Therefore, an organization should create a fraud risk assessment plan and ensure that proper internal controls are in place. Mountain Sporting Goods were supposed to have one. For this to work, the owners or management must fully understand the business and the environment in which it is working in.
However, when the proprietor, JD, the family did not understand the business and eventually entrusted their friend TW to manage and run the business.
Pawn shop management was expected to put in place controls to provide reasonable assurance regarding the achievement of the objective, effectiveness and efficiency of operations reliability of financial reports.
Phase I: red flags, fraud hypothesis:
1. Misappropriation and misuse of company assets. This may include assets such as cash, data and property. This may include theft of resources and assets.
2. Financial fraud schemes.
3. Corruption. This is done through bribery in order to ensure a person with information does not disclose it, extortion by a person with influence over another and conflict of interest.
Red flags:
1. Tw is not a owner manage business: college student, not efficiency
2. sales are increasing each year, but NI is going down significantly, not making projection. Company has the ability to generate revenue, but NI decrease
3. Pawn shop sales for the year is really small- not the growth area, failure of the business
4. Inventory for the Pawn shop is not on the book (ending inventory that was not redeemed should recorded)- inflating sales, purchases , sales will not recorded on the book(pawn), inventory not on the book, loan repayment by cash—workman can take home some cash, inventory… no traces on sales, cash, inventory
Loan(pawn) GAAP
Purchase 100 Inventory ...
PPP Second Draw 2021 and First Round Forgiveness Review
PPP Round 2 and PPP Round 1 Forgiveness Review
An analysis of the newly passed laws revitalizing the Paycheck Protection Program and approving a Second Draw.
(c) Donaldson Legal Counseling PLLC 2021 All Rights Reserved
Current information as of 1/7/2021
This is not legal advice. For legal advising consult an attorney.
Running head Cardinal Wholesalers’ Case .docx
Running head: Cardinal Wholesalers’ Case 1
Cardinal Wholesalers’ Case 5
Cardinal Wholesalers’ Case
Cardinal Wholesalers’ Case
Assignment 1
It is important to understand the factors that influence people to commit fraud. The three factors commonly associated with fraud include opportunity, pressure, and rationalization. Bill Carter and Mike Smith defrauded Cardinal Wholesalers for years until they were apprehended. Evaluation of Bill Carter and Mike Smith under the fraud triangle will help determine the factors that influenced their decision to commit fraud.
Bill Carter
Bill Carter had just been fired for visiting inappropriate websites while at the company. Bill Carter felt that he was fired unfairly since other employees also visited such sites yet they were never fired. Based on such, Bill Carter could use rationalization in justifying the reason why he decided to defraud the company. Under rationalization, Bill could also justify the reason why he defrauded the company since it was still making profits. Since their fraud acts did not negatively influence the profits of the company, Bill Carter could justify his acts (Dellaportas, 2013).
The second factor as per the fraud triangle that influenced Carter`s decision to defraud the company was due to financial pressure. After being fired, Bill Carter did not have a source of income yet he was expected to $38,000 in debts plus school fee for his son who attended an expensive college. Bill was losing his patience after unsuccessfully looking for employment and it was then he knew that he had to look for an option to pay off his bills and to be able to survive, thus leading to his thoughts on defrauding his former company (Dellaportas, 2013).
The third aspect that drove Bill Carter to committing fraud was the opportunity. Bill was Mike1`s friend who well knew that he had been fired unfairly. Due to the sympathy that Mike had for Bill, Bill well knew that he would help him in committing fraud (Dellaportas, 2013).
Mike Smith
After Bill Carter was fired, Mike Smith took Carter’s position as the head of purchases. One of the factors that influenced Smith`s decision to defraud the company was the opportunity. Since he was the head of purchases, he had the opportunity to approve of all the transactions that were being made on behalf of the company, which meant that he would make bogus transactions without him being noticed. In addition, Carter knew of this opportunity, which made it easier for him to convince Carter to be his accomplice (Dellaportas, 2013).
The second factor as per the fraud triangle that led to Mike Smith defrauding his company was the financial pressure that he was under. Despite being young and single, Mike smith had accumulated debt as a result of his expensive lifestyle. Mike Smith loved expensive things and was also addicted to gambling, which affected his financial stability. As a result, Mike Smith was under financia.
Bad Debts
Bad debt, in an accounting environment, represents revenue from sales that were purchased on credit and/or notes receivable that have proven uncollectible
ACCT323 Final exam1.Which of the following represents .docx
ACCT323 Final exam
1.
Which of the following represents the largest percentage of state tax revenue?
Sales tax
Individual income tax
Other
Property tax
None of these
2.
Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?
Convenience
Economy
Certainty
Equity
None of these
3.
The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of _______.
A sin tax to discourage undesirable behavior
A government fine
An earmarked tax
Both A and C
None of these
4.
If Susie earns $750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2012?
$231,639.50
$262,500.00
$239,261.00
$236,435.00
None of these
5.
Which of the following is not considered a primary authority?
Tax Court case.
Regulation.
Revenue Ruling.
Tax service.
None of these.
6.
Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?
rev: 03_21_2013_QC_28372
Filing status.
Taxpayer's gross income.
Taxpayer's occupation.
Taxpayer's age.
None of these.
7
.
Corporations are required to file a tax return only if their taxable income is greater than:
$0.
$1,000.
$600.
$750.
None of these. Corporations are always required to file a tax return.
8.
Lavonda discovered that the U.S. Circuit Court of Appeals for the Federal Circuit has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:
Tax Court only.
U.S. Court of Federal Claims only.
U.S. District Court only.
Tax Court or the U.S. District Court.
Tax Court or the U.S. Court of Federal Claims.
9.
Jason's employer pays year-end bonuses each year on December 31. Jason, a cash basis taxpayer, would prefer to not pay tax on his bonus this year (and actually would prefer his daughter to pay tax on the bonus). So, he leaves town on December 31, 2011 and has his daughter, Julie, pick up his check on January 2nd, 2012. Who reports the income and when?
Julie in 2011
Julie in 2012
Jason in 2011
Jason in 2012
None of these
Top of Form
10.
Investing in municipal bonds to avoid paying tax on interest earned and to earn a higher after-tax yield is an example of:
conversion
tax evasion
timing
income shifting
None of these
Bottom of Form
11.
Which of the following increases the benefits of income deferral?
increasing tax rates
smaller after-tax rate of return
larger after-tax rate of return
smaller magnitude of transactions
None of these
12.
Which of the following is an example of the timing strategy?
A corporation paying its shareholders a $20,000 dividend
A parent employing her child in the family business
A taxpayer gifting stock to his children
A cash-basis busi.
I need help please with these 2 assignments. of ul Uus Oll ook.pdf
I need help please with these 2 assignments. of ul Uus Oll ook value mpact hical Dilemma
What\'s an expense? differences nge over the ATC 6-5 Several years ago, Wilson Blowhard
founded a communications company. The company became suc of its competitors. In fact, most ,
Wi cesful and grew by expanding its customer base and acquiring some f its growth resulted
from acquiring other companies. Mr. Blowhard is adamant about continuing the company\'s
growth and increasing its continue to increase at a rapid pace nal assets net worth. To achieve
these goals, the business\'s net income must If the company\'s net worth continues to rise, Mr.
Blowhard plans to sell the company and retire. -term assets licon micro- ften thought rms 10-K
or ing require- tructions in bsite; Intel\'s He is, therefore, focused on improving the company\'s
profit any way he can In the communications business, companies often use the lines of other
communications compa nies. This line usage is a significant operating expense for Mr.
Blowhard\'s company. Generally ac urred cepted accounting principles require operating costs
like line use to be expensed as they are ino each year. Each dollar of line cost reduces net income
by a dollar. After reviewing the company\'s operations, Mr. Blowhard concluded that the
company did not cur rently need all of the line use it was paying for. It was really paying the
owner of the lines now so that the line use would be available in the future for all of Mr.
Blowhard\'s expected new customers. Mr. Blowhard instructed his accountant to capitalize all of
the line cost charges and depreciate them over 10 years. The accountant reluctantly followed Mr.
Blowhard\'s instructions and the company\'s net income for the cur- rent year showed a
significant increase over the prior year\'s net income. Mr. Blowhard had found a way they are not
plant, to report continued growth in the company\'s net income and increase the value of the
company Required operty, a. How does Mr. Blowhard\'s scheme affect the amount of income
that the company would otherwise eview the AICPA\'s Articles of Professional Conduct (see
Chapter 4) and comment on any of the the fraud triangle discussed in Chapter 4 and comment on
the features of the fraud triangle eer? re port in its financial statements and how does the scheme
affect the company\'s balance sh Explain your answer standards that were violated that are
evident in this case ssets 00%
Solution
ATC 6-5
Answer to Assignment 1 :
a. Operating expenses have to be charged to the Statement of Profit and Loss instead of treating
it as a capital expenditure although the company did not utilise all of the expenses that it was
paying for. The accountants treatment of operating expenses as capital expenditure will overstate
profits particularly the EBIDTA of the enterprise. It will subsequently increase the retained
profits in case the company is profitable in the year. Also, assets will be orreneously increased
since the expenditure .
China's collections and financial risk kirkendall sept 2018
What risks affect your business with China? How your customers finance their purchases, how your suppliers finance their business operations? Learn about Shadow Lending, Audits, Collections, China's Rush to IPO, Succession Planning, and more.
ECO315 Introduction to Money and BankingWEEK6 Homework (Financia.docx
ECO315 Introduction to Money and Banking
WEEK6 Homework (Financial Crisis)
Throughout the 2008 financial crisis, there are many examples related with the asymmetric information, the adverse problem, the moral hazard by the principal agent problem, and the conflicts of interest.
Find them related with following companies and financial programs:
· Investment Bank such as Lehman Brothers and Goldman Sachs
· Credit Rating Agency
· Subprime loans to collateral debt obligations (CDO)
· Credit default swaps (CDS)
· Fannie Mae and Freddie Mac (GSE)
· House prices and foreclosures
FINANCIAL MANAGEMENT
1. If a firm substitutes fixed for variable costs, which of the following will occur? A. The use of financial leverage will be increased.
B. The degree of operating leverage will be increased.
C. The break-even level of output will be reduced.
D. The profits will always be higher.
2. If investors want to limit financial risk and maximize their control of the business, which of the following
forms of business should they prefer?
A. Limited partnership
B. S corporation
C. Sole proprietorship
D. Corporation
3. A firm does not obtain financial leverage by
A. issuing preferred stock.
B. issuing common stock.
C. issuing bonds.
D. borrowing from the bank.
4. Unsuccessful use of financial leverage
A. increases earnings per share.
B. increases investors' rate of return.
C. decreases earnings per share.
D. decreases interest expense.
5. Which of these situations offers the best rationale for organizing a business as a limited partnership?
A. Management rejects the idea of personally assuming liability for the business.
B. You're an entrepreneur and you want two others' expertise, former business partners, to help execute your business plan.
C. Management needs to raise money through a stock offering, but does not want to relinquish control of the business to stockholders.
D. You want your small new business, which is operating out of your garage, to pay you and your partner (your spouse) dividends for which income tax will only be paid by you or your business, not both.
6. Which of the following is a correct statement about corporate losses?
A. They are carried forward three years and then carried back.
B. They are carried back three years and then carried forward.
C. They offset other sources of income in prior years.
D. They are carried forward to future years.
7. Break-even analysis requires knowing the relationship between
A. sales and total costs.
B. sales and earnings.
C. sales and assets.
D. total revenues and fixed costs.
8. If a firm produces 50,000 widgets and sells each unit for $20.50, what is the total revenue generated by
this production?
A. $1,025,000
B. $100,250
C. $10,250
D. $10,250,000
9. If Sam's Diner has an EBIT of $350,000, what are the diner's net earnings after paying $50,000 in
taxes and $34,000 in interest?
A. $266,000
B. $334,000
C. $311,000
D. $434,000
10. An increase of cost of capital will
A. decrease an invest ...
Financial Management Quiz 1Please follow all instructions .docx
Financial Management Quiz 1
Please follow all instructions very carefully. You need to return your answers to me no later than 12:00 noon on
Friday, October 14. If you respond after that time, you cannot get a grade higher than a B regardless of how many you
get correct. I will try to remember to send out a reminder in advance.
You may submit your answers in any of the following ways:
Mark up the quiz itself, scan it, and email it to me (do not use RED ink).
Fill out the answer sheet that is attached as a Word document and email it to me.
Make your own Excel or Word answer sheet and email it to me (do not use RED font).
Put your answers in the body of an email message (do not use RED font).
When you send me your email, please send it to [email protected] All
attachments must be in Word, Excel, or pdf, and must include your name.
Note that a multiple-choice question can have only ONE answer.
For each of the following, select TRUE or FALSE
1. The Internal Revenue Service is the department of the United States Government
responsible for passing tax laws.
TRUE FALSE
2. Of all the people involved in the creation and analysis of financial reports, the one least
likely to be presenting financial statements to the board of directors is the bookkeeper.
TRUE FALSE
3. Two major forms of accounting are cash basis and accrual basis. If the terms "accounts
receivable" or "accounts payable" appear on your balance sheet, you are using
the accrual basis of accounting.
TRUE FALSE
EXTRA CREDIT: Briefly explain "deferred income," giving an example from the world of the
performing arts.
For each of the following, select the best answer from a-d.
4. Which of the following statements is FALSE?
a. Your organization borrows $2,500,000 at an annual rate of 6%. If you pay no principal during
life of the loan, the annual interest cost on the loan is $150,000.
b. "Fixed assets" is another term for cash, accounts receivable, and other similar items of
property.
c. According to the textbook, a "Benefit Corporation" is not a tax-exempt nonprofit entity,
but it does include a social goal as well as a profit motive.
d. The bylaws of an organization specify which officers must be part of the organization's
governance. Another item that should be part of the bylaws is how many members of
the board of directors make up a quorum.
Page 1 of 4
5. Which of the following is TRUE?
a. On a Form 990, an organization's assets are divided into current assets and
non-current assets.
b. If a nonprofit has $1,500,000 in pledges receivable, and $500,000 of that amount is due
in the next 12 months, then $1,000,000 of the pledges will be counted in the
calculation of the organization's current ratio.
c. The most common kind of investments that nonprofits own are intended to produce
positive investment return. The earnings on investments, like a profit that comes
from having more operating revenue than expenses, are not subject to Federal income tax ...
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]Tom .docx
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]
Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department.
The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president’s son, had become plant manager a year earlier.
As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I never know whether my department’s accounting reports will show good or bad performance. I’m beginning to expect the worst. If the accountants say I saved the company a dollar, I’m called ‘Sir,’ but if I spend even a little too much—boy, do I get in trouble. I don’t know if I can hold on until I retire.”
Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with Ferguson & Son for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department.
When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant manager’s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father.
Tom Emory’s conversation with Jim Morris continued as follows:
Emory:
I really don’t understand. We’ve worked so hard to meet the budget, and the minute we do so they tighten it on us. We can’t work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don’t tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time.
Page 390
Morris:
I’m sorry about that, ...
On the Frontlines: Insurance Basics and Trends for House Directors
House Directors are on the frontlines of risk management for women's fraternities and sororities. Review this presentation to see how the insurance program works for House Directors, how House Directors can influence risk management at the chapter house, and helpful resources for House Directors.
Financial EthicsLearning ObjectivesAfter completing th.docx
Financial Ethics
Learning Objectives
After completing this chapter, you should be able to:
• Describe the common dilemmas that accountants and financial officers face.
• Consider how commercial conflicts of interest may arise in preparing accounts and financial reports, and
examine whether such conflicts are best dealt with by the government or the marketplace.
• Understand some of the ways companies cheat on financial reports.
• Assess the advantages and disadvantages of insider dealing.
• Explain the problem of rogue trading.
• Describe the various regulations concerning financial practice.
Associated Press/Peter Morgan
7
fie66722_07_c07_165-186.indd 165 3/2/12 9:43 AM
CHAPTER 7Section 7.1 Introduction
Contents
7.1 Introduction
7.2 The Ethics of Accounting
Impartiality
Berle and Means Versus Henry Manne: Two Views of Corporate Corruption
Cooking the Books
Transfer Pricing and Costing
The Ethics of Deception
U.S. Accounting and Reporting History
7.3 Commercial Conflicts of Interest
The Buyer-Beware Principle
Complex Products
Should Customers Do Their Homework?
7.4 Insider Trading
Insider Trading Defined
Examples of Insider Trading
The Free Market Perspective
An Issue of Fairness
Legal Theory of Misappropriation
7.5 Rogue Trading
Example of Rogue Trading: Nick Leeson
What Can Be Done?
7.6 Conclusion
7.1 Introduction
Recently, a steady stream of major financial scandals have rocked the business world. At one
point, Enron (in the United States) was one of the world’s largest utility companies. Within a year,
a massive accounting fraud was uncovered, leading to its bankruptcy. The U.S. communications
company WorldCom was found to have been covering a $3.8 billion fraud, inflating its asset values
to make it look financially healthier than it really was. More recently, the American businessman
Bernard Madoff defrauded some 4,800 clients—including many charities—of $65 billion.
Accountants are trained professionals who are accredited and licensed to provide professional
services concerning the accounts, audits, and reporting of corporations’ finances. Many are mem-
bers of professional organizations, such as the American Institute of Certified Public Accountants,
that have ethical principles or codes of professional conduct that members pledge to adhere
to. Like medical professionals, they are expected to live up to a professional reputation that has
developed over many decades. But innovation in the business world, as well as globalization, has
166
fie66722_07_c07_165-186.indd 166 3/2/12 9:43 AM
CHAPTER 7Section 7.2 The Ethics of Accounting
put increasing pressures on accountants, auditors, and CEOs that can affect their professional
judgment and lead to accounting fraud. Such fraud is costly—in fact, it is estimated to cost the U.S.
economy over $300 billion annually.
In the wake of notable fraud cases such as the ones mentioned earlier, the financial profes-
sion has been under int ...
Jeff typically makes 75 of his field goals. Steve typically makes 5.pdf
Jeff typically makes 75% of his field goals. Steve typically makes 55% of his field goals.
Suppose they both have the opportunity to kick 3 field goals.
What is the probability Jeff will succeed in making at least 1 field goal? (0.0001)
What is the probability Steve will succeed in making at least 1 field goal? (0.0001)
What is the probability that both Steve and Jeff will succeed in making at least one field goal?
(0.0001)
What is the probability that either Steve or Jeff will succeed in making at least one field goal?
(0.0001)
Given that only one field goal total was scored, what is the probability that Jeff was the one who
kicked it? (0.0001)
Solution
p(jeff) = 0.75 p(steve) = 0.55
p(jess scores atleast 1) = 1 - (0.25)^3 = 0.984375
p(steve scores atleast 1) = 1 - (0.45)^3 = 0.908875
p(both score atleast one goal) = 0.984375 x 0.908875 = 0.89467
p(either jeff or steve score atleast one goal) = 0.984375 + 0.908875 - 0.89467 = 0.99858
p(jeff scores 1 goal and steve none), p1 = 3*0.75*(0.25)^2*(0.45)^3 = 0.01281
p(steve scores 1 goal and jeff none), p2 = 3*0.55*(0.45)^2*(0.25)^3 = 0.00522
thus, p(jeff scores the only goal scored) = p1/(p1+p2) = 0.71.
Jean the business owner has received notice that Paul the Potential .pdf
Jean the business owner has received notice that Paul the Potential Plaintiff has fallen on
property owned by Jean and claims to be injured.
Using concepts you have learned in Chapter 27, 30, and 37, please give a list of questions you
would want to ask about:
1. The nature of Jean
Solution
Hi,
1) I would ask if the business is onwed solely by Jean or is it onwed in a partnership
2) I would ask if the property is onwed by Jean or is it on lease
3) I would if Jean has porperty and casulaty insurance and to upto what amount these insurance
has covers.
Jill has a swimming pool in her backyard. It is shaped like a rectan.pdf
Jill has a swimming pool in her backyard. It is shaped like a rectangle, and measures
approximately 16.4 feet wide and 26.25 feet long. It is an average of 5 feet deep. During a few
hot weeks during the summer, some water evaporates from the pool, and Jill needs to add 10
inches of water to the depth of the pool, using her garden hose. Although her water pressure
varies, the water flows through Jill
Solution
n.
Jennifer VanPelt is the assistant chief accountant at BIT Company, a.pdf
Jennifer VanPelt is the assistant chief accountant at BIT Company, a manufacturer of computer
chips and cellular phones. The company presently has total sales of $20 million. It is the end of
the first quarter and Jennifer is hurriedly trying to prepare a trial balance so that quarterly
financial statements can be prepared and released to management and the regulatory agencies.
The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m.
deadline, Jennifer decides to force the debits and credits into balance by adding the amount of
the difference to the Equipment account. She chose Equipment because it is one of the larger
account balances; percentage-wise it will be the least misstated. Jennifer plugs the difference!
She believes that the difference is quite small and will not affect anyone\'s decisions. She wishes
that she had another few days to find the error but realizes that the financial statements are
already late.
Instructions 1. Who are the stakeholders in this situation?
2. What ethical issues are involved?
3. What are Jennifer\'s alternatives?
Solution
Answer:1 . Stakeholders are the people who are affected by the decision. That would be Jennifer
VanPelt, her manager, the company, the shareholders, and whoever is in charge of the
Equipment account.
Answer:2 The ethical issue is malfeasance. If Jennifer VanPelt is dishonest even though it was
probably someone else\'s mistake, she is getting herself wrapped up in a problem and making it
worse. Plugging numbers means not only is the mistake going to remain, but now the Equipment
account is messed up, too.
Answer:3 Jennifer\'s first alternative would be to go to the chief accountant and point out the
discrepancy. Since the credits exceed the debits, this shouldn\'t be a big deal, because there isn\'t
any money missing. Her second alternative would be to ask for an extension due to the
discrepancy. The third alternative would just be to submit the numbers, even though they don\'t
balance, and say that it should only take a few days to find the problem..
Java - a mergeSort algorithm using arraylists or arraysSolution.pdf
Java - a mergeSort algorithm using arraylists or arrays
Solution
/* Java implementation of for Merge Sort using arrays */
class MergeSort
{
// merging the two subarrays
void merge(int intArray[], int left, int middle, int right)
{
int length1 = middle - left + 1;
int length2 = right - middle;
// First subarray is arr[left..middle]
int Larray[] = new int [length1];
// Second subarray is arr[middle+1..right]
int Rarray[] = new int [length2];
/*Copy data to arrays*/
for (int i=0; i.
Janie graduates from high school in 2014 and enrolls in college in t.pdf
Janie graduates from high school in 2014 and enrolls in college in the fall. Her parents pay $4000
for her tuition and fees.
Assuming Janies\'s parents have AGI of $170,000, what is the American Opportunity tax credit
they can claim for Janie?
Solution
Assuming Janies parents have AGI of $170000 , the maximum the Parents can claim under
American Opprtunity tax credit for JAnie is $2500 for 2014.
James placed $7,500 in a certificate of deposit (CD) at his local ba.pdf
James placed $7,500 in a certificate of deposit (CD) at his local bank. The interest the CD
generated was $731.25. If the interest rate was 6.5%, how many months was the money
deposited?
Solution
Use the formula Interest = Principal.
Jane is a tax consultant whose clients visit her office following a .pdf
Jane is a tax consultant whose clients visit her office following a Poisson process with the rate of
three clients per hour. She went out for lunch for one hour yesterday. When she left her office at
12:00 PM, there were no clients. When she came back at 1:00 PM, there were two clients waiting
for her. What is the probability that both clients had waited more than half an hour?
Solution
0.5*0.5= 0.25.
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What\'s an expense? differences nge over the ATC 6-5 Several years ago, Wilson Blowhard
founded a communications company. The company became suc of its competitors. In fact, most ,
Wi cesful and grew by expanding its customer base and acquiring some f its growth resulted
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or ing require- tructions in bsite; Intel\'s He is, therefore, focused on improving the company\'s
profit any way he can In the communications business, companies often use the lines of other
communications compa nies. This line usage is a significant operating expense for Mr.
Blowhard\'s company. Generally ac urred cepted accounting principles require operating costs
like line use to be expensed as they are ino each year. Each dollar of line cost reduces net income
by a dollar. After reviewing the company\'s operations, Mr. Blowhard concluded that the
company did not cur rently need all of the line use it was paying for. It was really paying the
owner of the lines now so that the line use would be available in the future for all of Mr.
Blowhard\'s expected new customers. Mr. Blowhard instructed his accountant to capitalize all of
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Blowhard\'s instructions and the company\'s net income for the cur- rent year showed a
significant increase over the prior year\'s net income. Mr. Blowhard had found a way they are not
plant, to report continued growth in the company\'s net income and increase the value of the
company Required operty, a. How does Mr. Blowhard\'s scheme affect the amount of income
that the company would otherwise eview the AICPA\'s Articles of Professional Conduct (see
Chapter 4) and comment on any of the the fraud triangle discussed in Chapter 4 and comment on
the features of the fraud triangle eer? re port in its financial statements and how does the scheme
affect the company\'s balance sh Explain your answer standards that were violated that are
evident in this case ssets 00%
Solution
ATC 6-5
Answer to Assignment 1 :
a. Operating expenses have to be charged to the Statement of Profit and Loss instead of treating
it as a capital expenditure although the company did not utilise all of the expenses that it was
paying for. The accountants treatment of operating expenses as capital expenditure will overstate
profits particularly the EBIDTA of the enterprise. It will subsequently increase the retained
profits in case the company is profitable in the year. Also, assets will be orreneously increased
since the expenditure .
China's collections and financial risk kirkendall sept 2018
What risks affect your business with China? How your customers finance their purchases, how your suppliers finance their business operations? Learn about Shadow Lending, Audits, Collections, China's Rush to IPO, Succession Planning, and more.
ECO315 Introduction to Money and BankingWEEK6 Homework (Financia.docx
ECO315 Introduction to Money and Banking
WEEK6 Homework (Financial Crisis)
Throughout the 2008 financial crisis, there are many examples related with the asymmetric information, the adverse problem, the moral hazard by the principal agent problem, and the conflicts of interest.
Find them related with following companies and financial programs:
· Investment Bank such as Lehman Brothers and Goldman Sachs
· Credit Rating Agency
· Subprime loans to collateral debt obligations (CDO)
· Credit default swaps (CDS)
· Fannie Mae and Freddie Mac (GSE)
· House prices and foreclosures
FINANCIAL MANAGEMENT
1. If a firm substitutes fixed for variable costs, which of the following will occur? A. The use of financial leverage will be increased.
B. The degree of operating leverage will be increased.
C. The break-even level of output will be reduced.
D. The profits will always be higher.
2. If investors want to limit financial risk and maximize their control of the business, which of the following
forms of business should they prefer?
A. Limited partnership
B. S corporation
C. Sole proprietorship
D. Corporation
3. A firm does not obtain financial leverage by
A. issuing preferred stock.
B. issuing common stock.
C. issuing bonds.
D. borrowing from the bank.
4. Unsuccessful use of financial leverage
A. increases earnings per share.
B. increases investors' rate of return.
C. decreases earnings per share.
D. decreases interest expense.
5. Which of these situations offers the best rationale for organizing a business as a limited partnership?
A. Management rejects the idea of personally assuming liability for the business.
B. You're an entrepreneur and you want two others' expertise, former business partners, to help execute your business plan.
C. Management needs to raise money through a stock offering, but does not want to relinquish control of the business to stockholders.
D. You want your small new business, which is operating out of your garage, to pay you and your partner (your spouse) dividends for which income tax will only be paid by you or your business, not both.
6. Which of the following is a correct statement about corporate losses?
A. They are carried forward three years and then carried back.
B. They are carried back three years and then carried forward.
C. They offset other sources of income in prior years.
D. They are carried forward to future years.
7. Break-even analysis requires knowing the relationship between
A. sales and total costs.
B. sales and earnings.
C. sales and assets.
D. total revenues and fixed costs.
8. If a firm produces 50,000 widgets and sells each unit for $20.50, what is the total revenue generated by
this production?
A. $1,025,000
B. $100,250
C. $10,250
D. $10,250,000
9. If Sam's Diner has an EBIT of $350,000, what are the diner's net earnings after paying $50,000 in
taxes and $34,000 in interest?
A. $266,000
B. $334,000
C. $311,000
D. $434,000
10. An increase of cost of capital will
A. decrease an invest ...
Financial Management Quiz 1Please follow all instructions .docx
Financial Management Quiz 1
Please follow all instructions very carefully. You need to return your answers to me no later than 12:00 noon on
Friday, October 14. If you respond after that time, you cannot get a grade higher than a B regardless of how many you
get correct. I will try to remember to send out a reminder in advance.
You may submit your answers in any of the following ways:
Mark up the quiz itself, scan it, and email it to me (do not use RED ink).
Fill out the answer sheet that is attached as a Word document and email it to me.
Make your own Excel or Word answer sheet and email it to me (do not use RED font).
Put your answers in the body of an email message (do not use RED font).
When you send me your email, please send it to [email protected] All
attachments must be in Word, Excel, or pdf, and must include your name.
Note that a multiple-choice question can have only ONE answer.
For each of the following, select TRUE or FALSE
1. The Internal Revenue Service is the department of the United States Government
responsible for passing tax laws.
TRUE FALSE
2. Of all the people involved in the creation and analysis of financial reports, the one least
likely to be presenting financial statements to the board of directors is the bookkeeper.
TRUE FALSE
3. Two major forms of accounting are cash basis and accrual basis. If the terms "accounts
receivable" or "accounts payable" appear on your balance sheet, you are using
the accrual basis of accounting.
TRUE FALSE
EXTRA CREDIT: Briefly explain "deferred income," giving an example from the world of the
performing arts.
For each of the following, select the best answer from a-d.
4. Which of the following statements is FALSE?
a. Your organization borrows $2,500,000 at an annual rate of 6%. If you pay no principal during
life of the loan, the annual interest cost on the loan is $150,000.
b. "Fixed assets" is another term for cash, accounts receivable, and other similar items of
property.
c. According to the textbook, a "Benefit Corporation" is not a tax-exempt nonprofit entity,
but it does include a social goal as well as a profit motive.
d. The bylaws of an organization specify which officers must be part of the organization's
governance. Another item that should be part of the bylaws is how many members of
the board of directors make up a quorum.
Page 1 of 4
5. Which of the following is TRUE?
a. On a Form 990, an organization's assets are divided into current assets and
non-current assets.
b. If a nonprofit has $1,500,000 in pledges receivable, and $500,000 of that amount is due
in the next 12 months, then $1,000,000 of the pledges will be counted in the
calculation of the organization's current ratio.
c. The most common kind of investments that nonprofits own are intended to produce
positive investment return. The earnings on investments, like a profit that comes
from having more operating revenue than expenses, are not subject to Federal income tax ...
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]Tom .docx
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]
Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department.
The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president’s son, had become plant manager a year earlier.
As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I never know whether my department’s accounting reports will show good or bad performance. I’m beginning to expect the worst. If the accountants say I saved the company a dollar, I’m called ‘Sir,’ but if I spend even a little too much—boy, do I get in trouble. I don’t know if I can hold on until I retire.”
Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with Ferguson & Son for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department.
When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant manager’s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father.
Tom Emory’s conversation with Jim Morris continued as follows:
Emory:
I really don’t understand. We’ve worked so hard to meet the budget, and the minute we do so they tighten it on us. We can’t work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don’t tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time.
Page 390
Morris:
I’m sorry about that, ...
On the Frontlines: Insurance Basics and Trends for House Directors
House Directors are on the frontlines of risk management for women's fraternities and sororities. Review this presentation to see how the insurance program works for House Directors, how House Directors can influence risk management at the chapter house, and helpful resources for House Directors.
Financial EthicsLearning ObjectivesAfter completing th.docx
Financial Ethics
Learning Objectives
After completing this chapter, you should be able to:
• Describe the common dilemmas that accountants and financial officers face.
• Consider how commercial conflicts of interest may arise in preparing accounts and financial reports, and
examine whether such conflicts are best dealt with by the government or the marketplace.
• Understand some of the ways companies cheat on financial reports.
• Assess the advantages and disadvantages of insider dealing.
• Explain the problem of rogue trading.
• Describe the various regulations concerning financial practice.
Associated Press/Peter Morgan
7
fie66722_07_c07_165-186.indd 165 3/2/12 9:43 AM
CHAPTER 7Section 7.1 Introduction
Contents
7.1 Introduction
7.2 The Ethics of Accounting
Impartiality
Berle and Means Versus Henry Manne: Two Views of Corporate Corruption
Cooking the Books
Transfer Pricing and Costing
The Ethics of Deception
U.S. Accounting and Reporting History
7.3 Commercial Conflicts of Interest
The Buyer-Beware Principle
Complex Products
Should Customers Do Their Homework?
7.4 Insider Trading
Insider Trading Defined
Examples of Insider Trading
The Free Market Perspective
An Issue of Fairness
Legal Theory of Misappropriation
7.5 Rogue Trading
Example of Rogue Trading: Nick Leeson
What Can Be Done?
7.6 Conclusion
7.1 Introduction
Recently, a steady stream of major financial scandals have rocked the business world. At one
point, Enron (in the United States) was one of the world’s largest utility companies. Within a year,
a massive accounting fraud was uncovered, leading to its bankruptcy. The U.S. communications
company WorldCom was found to have been covering a $3.8 billion fraud, inflating its asset values
to make it look financially healthier than it really was. More recently, the American businessman
Bernard Madoff defrauded some 4,800 clients—including many charities—of $65 billion.
Accountants are trained professionals who are accredited and licensed to provide professional
services concerning the accounts, audits, and reporting of corporations’ finances. Many are mem-
bers of professional organizations, such as the American Institute of Certified Public Accountants,
that have ethical principles or codes of professional conduct that members pledge to adhere
to. Like medical professionals, they are expected to live up to a professional reputation that has
developed over many decades. But innovation in the business world, as well as globalization, has
166
fie66722_07_c07_165-186.indd 166 3/2/12 9:43 AM
CHAPTER 7Section 7.2 The Ethics of Accounting
put increasing pressures on accountants, auditors, and CEOs that can affect their professional
judgment and lead to accounting fraud. Such fraud is costly—in fact, it is estimated to cost the U.S.
economy over $300 billion annually.
In the wake of notable fraud cases such as the ones mentioned earlier, the financial profes-
sion has been under int ...
Similar to Jim Smith has worked for the ABC Insurance Company for the past twen.pdf (14)
I need help please with these 2 assignments. of ul Uus Oll ook.pdf
I need help please with these 2 assignments. of ul Uus Oll ook.pdf
China's collections and financial risk kirkendall sept 2018
China's collections and financial risk kirkendall sept 2018
ECO315 Introduction to Money and BankingWEEK6 Homework (Financia.docx
ECO315 Introduction to Money and BankingWEEK6 Homework (Financia.docx
Financial Management Quiz 1Please follow all instructions .docx
Financial Management Quiz 1Please follow all instructions .docx
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]Tom .docx
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]Tom .docx
Bailout solutions accounting, tax, & consulting, llc
Bailout solutions accounting, tax, & consulting, llc
On the Frontlines: Insurance Basics and Trends for House Directors
On the Frontlines: Insurance Basics and Trends for House Directors
Financial EthicsLearning ObjectivesAfter completing th.docx
Financial EthicsLearning ObjectivesAfter completing th.docx
More from ahalyak3
Jeff typically makes 75 of his field goals. Steve typically makes 5.pdf
Jeff typically makes 75% of his field goals. Steve typically makes 55% of his field goals.
Suppose they both have the opportunity to kick 3 field goals.
What is the probability Jeff will succeed in making at least 1 field goal? (0.0001)
What is the probability Steve will succeed in making at least 1 field goal? (0.0001)
What is the probability that both Steve and Jeff will succeed in making at least one field goal?
(0.0001)
What is the probability that either Steve or Jeff will succeed in making at least one field goal?
(0.0001)
Given that only one field goal total was scored, what is the probability that Jeff was the one who
kicked it? (0.0001)
Solution
p(jeff) = 0.75 p(steve) = 0.55
p(jess scores atleast 1) = 1 - (0.25)^3 = 0.984375
p(steve scores atleast 1) = 1 - (0.45)^3 = 0.908875
p(both score atleast one goal) = 0.984375 x 0.908875 = 0.89467
p(either jeff or steve score atleast one goal) = 0.984375 + 0.908875 - 0.89467 = 0.99858
p(jeff scores 1 goal and steve none), p1 = 3*0.75*(0.25)^2*(0.45)^3 = 0.01281
p(steve scores 1 goal and jeff none), p2 = 3*0.55*(0.45)^2*(0.25)^3 = 0.00522
thus, p(jeff scores the only goal scored) = p1/(p1+p2) = 0.71.
Jean the business owner has received notice that Paul the Potential .pdf
Jean the business owner has received notice that Paul the Potential Plaintiff has fallen on
property owned by Jean and claims to be injured.
Using concepts you have learned in Chapter 27, 30, and 37, please give a list of questions you
would want to ask about:
1. The nature of Jean
Solution
Hi,
1) I would ask if the business is onwed solely by Jean or is it onwed in a partnership
2) I would ask if the property is onwed by Jean or is it on lease
3) I would if Jean has porperty and casulaty insurance and to upto what amount these insurance
has covers.
Jill has a swimming pool in her backyard. It is shaped like a rectan.pdf
Jill has a swimming pool in her backyard. It is shaped like a rectangle, and measures
approximately 16.4 feet wide and 26.25 feet long. It is an average of 5 feet deep. During a few
hot weeks during the summer, some water evaporates from the pool, and Jill needs to add 10
inches of water to the depth of the pool, using her garden hose. Although her water pressure
varies, the water flows through Jill
Solution
n.
Jennifer VanPelt is the assistant chief accountant at BIT Company, a.pdf
Jennifer VanPelt is the assistant chief accountant at BIT Company, a manufacturer of computer
chips and cellular phones. The company presently has total sales of $20 million. It is the end of
the first quarter and Jennifer is hurriedly trying to prepare a trial balance so that quarterly
financial statements can be prepared and released to management and the regulatory agencies.
The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m.
deadline, Jennifer decides to force the debits and credits into balance by adding the amount of
the difference to the Equipment account. She chose Equipment because it is one of the larger
account balances; percentage-wise it will be the least misstated. Jennifer plugs the difference!
She believes that the difference is quite small and will not affect anyone\'s decisions. She wishes
that she had another few days to find the error but realizes that the financial statements are
already late.
Instructions 1. Who are the stakeholders in this situation?
2. What ethical issues are involved?
3. What are Jennifer\'s alternatives?
Solution
Answer:1 . Stakeholders are the people who are affected by the decision. That would be Jennifer
VanPelt, her manager, the company, the shareholders, and whoever is in charge of the
Equipment account.
Answer:2 The ethical issue is malfeasance. If Jennifer VanPelt is dishonest even though it was
probably someone else\'s mistake, she is getting herself wrapped up in a problem and making it
worse. Plugging numbers means not only is the mistake going to remain, but now the Equipment
account is messed up, too.
Answer:3 Jennifer\'s first alternative would be to go to the chief accountant and point out the
discrepancy. Since the credits exceed the debits, this shouldn\'t be a big deal, because there isn\'t
any money missing. Her second alternative would be to ask for an extension due to the
discrepancy. The third alternative would just be to submit the numbers, even though they don\'t
balance, and say that it should only take a few days to find the problem..
Java - a mergeSort algorithm using arraylists or arraysSolution.pdf
Java - a mergeSort algorithm using arraylists or arrays
Solution
/* Java implementation of for Merge Sort using arrays */
class MergeSort
{
// merging the two subarrays
void merge(int intArray[], int left, int middle, int right)
{
int length1 = middle - left + 1;
int length2 = right - middle;
// First subarray is arr[left..middle]
int Larray[] = new int [length1];
// Second subarray is arr[middle+1..right]
int Rarray[] = new int [length2];
/*Copy data to arrays*/
for (int i=0; i.
Janie graduates from high school in 2014 and enrolls in college in t.pdf
Janie graduates from high school in 2014 and enrolls in college in the fall. Her parents pay $4000
for her tuition and fees.
Assuming Janies\'s parents have AGI of $170,000, what is the American Opportunity tax credit
they can claim for Janie?
Solution
Assuming Janies parents have AGI of $170000 , the maximum the Parents can claim under
American Opprtunity tax credit for JAnie is $2500 for 2014.
James placed $7,500 in a certificate of deposit (CD) at his local ba.pdf
James placed $7,500 in a certificate of deposit (CD) at his local bank. The interest the CD
generated was $731.25. If the interest rate was 6.5%, how many months was the money
deposited?
Solution
Use the formula Interest = Principal.
Jane is a tax consultant whose clients visit her office following a .pdf
Jane is a tax consultant whose clients visit her office following a Poisson process with the rate of
three clients per hour. She went out for lunch for one hour yesterday. When she left her office at
12:00 PM, there were no clients. When she came back at 1:00 PM, there were two clients waiting
for her. What is the probability that both clients had waited more than half an hour?
Solution
0.5*0.5= 0.25.
It is possible for the regression equation to have none of the actua.pdf
It is possible for the regression equation to have none of the actual (observed) data points located
on the regression line. true/false
False?
That doesn\'t seem like it\'d make any sense, but I don\'t know why...
Solution
It is possible, The regression line can be regarded as a \"mean\" for the set of data,
and, like the usual mean, its value doesn\'t necessarily coincide with any observed value..
It is thought that prehistoric Indians did not take their best tools.pdf
It is thought that prehistoric Indians did not take their best tools, pottery, and household items
when they visited higher elevations for their summer camps. It is hypothesized that
archaeological sites tend to lose their cultural identity and specific cultural affiliation as the
elevation of the site increases. Let x be the elevation (in thousands of feet) for an archaeological
site in the southwestern United States. Let y be the percentage of unidentified artifacts (no
specific cultural affiliation) at a given elevation. Suppose that the following data were obtained
for a collection of archaeological sites in New Mexico: What percentage of the variation in
y can be explained by the corresponding variation in x and the least-squares line? Answer
a.95.7% b.0.7% c.8.4% d.91.6% e.4.3%
Solution
0.945 so ur option is a. 95.7%.
It was hypothesized that sensory deprivation inhibits the intellectu.pdf
It was hypothesized that sensory deprivation inhibits the intellectual development of animals. To
test this hypothesis an experimenter used two rats, each of whom had just given birth to eight
pups. One rat and her litter were placed in a large cage with ample space and with objects to
explore. The pups of the second rat were separated from the mother, and each was placed in a
separate cage. These cages were quite small, and the only objects they could see (or hear) were
the four walls and the food dispenser. After five months both treatment groups of rats were tested
in a multiple-T maze using food as a reward. After 20 trials all of the nondeprived pups were
running the maze without error. On the other hand, the deprived pups were still making several
errors in the maze. This latter group of rats frequently \"froze\" in the start box and in the maze
and had to be prodded to move. The experimenter concluded that sensory deprivation inhibits
intellectual development such that deprived rats did not have the intellectual ability to learn a
simple maze.
who is the experimental group
who is the control group
what is the effect variable
what is the sampling frame
treatments
what is the dependent variable
Solution
1. animals: rats 2. humans 3. experiments 4. rats 5. multiple T maze 6. sensory
deprivation.
It is obvious that Taila values her privacy as she rarely talks abou.pdf
It is obvious that Taila values her privacy as she rarely talks about her husband and children in
conversations with her co-workers. Based on Trompenarrs dimensions of national culture, which
cultural dimension does Talia\'s behavior in the workplace most closely relate to?
Solution
Ans:
A) Specific vs. diffuse.
Its a hot summer day in the Central Valley. Two children Alice and.pdf
It\'s a hot summer day in the Central Valley. Two children Alice and Bob are engaged in a water
balloon (cid:12)fight. Alice hits her target with 75% probability while Bob is 50% accurate. They take
turns throwing water balloons, with Alice going (cid:12)first, until one of them is hit by a balloon. What
is the chance that Bob is the winner (scores the (cid:12)first hit)?
Solution
The chance of Alice missing is 1/4 and the chance of bob hitting is 1/2. Multiply
1/4*1/2=1/8.
Jack Hall is home to the Math Department. In 140 trips on the Jack H.pdf
Jack Hall is home to the Math Department. In 140 trips on the Jack Hall elevator, the average
waiting time for the car to arrive was 6 minutes. The largest number of trips (among those 140)
in which it took 12 minutes or longer for the car to arrive is _______.
Solution
exponential with lambda = 1/ 6 .
P(X > =12) = 1 - (1 - e^(-12 /6)) = e^-2 = 0.135
number of trips = 140*P(X >=12) = 140 * 0.135~ 19.
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Jeff typically makes 75 of his field goals. Steve typically makes 5.pdf
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Janie graduates from high school in 2014 and enrolls in college in t.pdf
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- 1. Jim Smith has worked for the ABC Insurance Company for the past twenty-three years. Jim graduated with a top-notch accounting degree and he also has his MBA. Bar none, Jim is considered by everyone in his organization to be a brilliant accountant. At issue is that Jim's brilliance may be coupled with just a little too much "creativity" when one considers his approach to maximizing the company's profits. At the end of every quarter, Jim calls up the supervisors of each of ABC's insurance branches, and asks them to estimate their outstanding insurance claims. These insurance claims represent money that the company very likely owes its customers – i.e., claims are estimates of money owed at the end of the quarter to ABC's customers who are likely to file a claim in the near future, but who have not yet done so (the total money owed - but still outstanding - is referred to as a "claims lag", since there is a lag from the date on which an insurable event has occurred to that point in time at which ABC has become aware that a customer has filed a valid claim). For instance, based on historical experience, at the end of each quarter, Division 1 of ABC Company estimates that 20% of all claims for that quarter are still outstanding (i.e., an insurable event has occurred, but has not yet been reported to Division 1). This is the number (20%) reported to Jim. Being the "brilliant" accountant that he is, and in light of his sheer eagerness to maximize profits for the quarter (and because his quarterly bonus is based on each quarter's profits!), Jim reduces the outstanding claims reported by all of ABC's insurance divisions by 10%. In doing so, Jim has effectively reduced the company's quarterly claims expenses by this same 10% --- and voila! -- Jim has also managed a creative increase in his own quarterly bonus. As you might guess, Jim sees nothing wrong in further reducing the divisions' company claims estimates, reasoning: "Look...they're all a bunch of estimates anyhow!" Jim further opines: "Besides, I have a duty to this company and to its stockholders - and that is to maximize profits!" Consider this situation from a virtue ethics perspective. What virtues are at stake? Solution Virtue ethics emphasises on an individual's character as the primary key of ethical thinking. The stress is on morals and character and moral behaviour. Virtues are postivie traits and morals and qualities which are morally good. From a virtue ethics perspective, Jim is presenting false numbers on a quarterly numbers. This may also be considered a case of fudging and misrepresenting the data. In other words Jim can also be said to be lying. Jim is consciously under-reporting the outstanding claims numbers every quarter, to increase his
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