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Fundamental principles
Fundamental principles require that a member of a professional accountancy body should behave with integrity in all professional, business and financial relationships and should strive for objectivity in all professional and business judgements. Objectivity can only be assured if the member is and is seen to be independent. Conflicts of interest have an important bearing on independence and hence also on the public's perception of the integrity, objectivity and independence of the accounting profession.
The following scenario is an example of press reports in recent years which deal with issues of objectivity and independence within a multinational firm of accountants:
'A partner in the firm was told by the regulatory body that he must resign because he was in breach of the regulatory body's independence rules, as his brother-in-law was financial controller of an audit client. He was told that the alternative was that he could move his home and place of work at least 400 miles from the offices of the client, even though he was not the reporting partner. This made his job untenable. The regulatory body was seen as 'taking its rules to absurd lengths' by the accounting firm. Shortly after this comment, the multinational firm announced proposals to split the firm into three areas between audit, tax and business advisory services; management consultancy; and investment advisory services'.
Required
Discuss the impact that the above events may have on the public perception of the integrity, objectivity and independence of the multinational firm of accountants.
The business recorded a machinery depreciation expense at the end of each quarter during the year, but no entry has been made for the fourth and final quarter. What adjusting entry for machinery depreciation should be recorded at year-end?
Soriano Company is preparing its budgeted income statement for 2010. Relevant data pertaining to its sales, production, and direct materials budgets can be found in the Do It! exercise on page 1026.
Calculate the cost of a standard job and a special job under the activity-based costing system and activity-based costing system to better manage itsbusiness?
In a recent annual report, eBay Inc. reported that during the year it issued stock of $128 million for acquisitions. How would this be reported on the statement of cash flows?
Stahl Inc. produces three separate products from a common process costing $100,000. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data f..
LDG Corporation makes and sells a product called Product WZ . Each unit of product EZ requires 4.10 hours of direct labor at the rate of $9.60 per direct labor hour. Management would like you to prepare a Direct Labor Budget for June.
Compute the cash flows from operating activities under the indirect method.
Depreciation reported on the tax return exceeded depreciation reported on the income statement by $128,000. This difference will reverse in equal amounts of $32,000 over the years 2015-2018. Interest received on municipal bonds was $11,600.
Explain how the use of absorption costing can encourage managers to engage in behaviour that is harmful to the organisation.
Recommend with supporting calculations, which of the two main courses of action suggested is the more advantageous from a purely cost and financial point of view
william sold section 1245 property for 25000 in 2012. the property cost 35000 when it was purchased five-years ago. the
progressive home health care inc. is a for-profit provider of home health care services in the pacific northwest. at
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