Auditing a Publicly Traded Company 2

US GAAP Alternative A: Meyer Inc. meets both of the characteristics of the primary beneficiary requirements as stated in ASC 810-10-25-38A and thus Florabama’s financials are consolidated up to Meyer Inc’s financial statements. In determining the power to direct the activities of a VIE that most significantly impacts the entity’s economic performance, the purpose and design of a legal entity must be evaluated (ASC 810-10-25-25). Through analysis of the business risks incurred in ASC 810-10-25-24, the most significant risk is the operations risk, commodity price risk, and also environmental risk. These risks are directly related to the strategic decisions regarding the operations of Florabama, such as operating and capital budgets, pricing of the power produced. These are the most significant activities regarding the economic performance of Florabama. According to the case information, these decisions are presented to the board and implemented by a simple majority vote among the ten members of the board of

Note: General Note The Status Section identifies changes to this Subtopic resulting from Accounting Standards Updates. The Section provides references to the affected Codification content and links to the related Accounting Standards Updates. Nonsubstantive changes for items such as editorial, link and similar corrections are included separately in Maintenance Updates.

• The SPEs financing should have been based on each SPEs own borrowing capacity and leverage levels. Offering Enron’s guarantee to creditors clearly eliminated the equity capitalization requirements for non-consolidation. The company should have had measures in place, which require additional approvals in regards to offering loan guarantees.

‘Cash and cash equivalents’ include certain short-term investments and, in some cases, bank overdrafts. Like IFRS, ‘cash and cash equivalents’ include certain shortterm investments, although not necessarily the same short-term investments as under IFRS. Unlike IFRS, bank overdrafts are considered a form of short-term financing, with changes therein classified as financing activities. The statement of cash flows presents cash flows during the period, classified by operating, investing and financing activities. Like IFRS, the statement of cash flows presents cash flows during the period, classified by operating, investing and financing activities. The separate components of a single transaction are classified as operating, investing or financing. Unlike IFRS, cash receipts and payments with attributes of more than one class of cash flows are classified based on the predominant source of the cash flows unless the underlying transaction is accounted for as having different components. Cash flows from operating activities may be presented using either the direct method or the indirect method. If the direct method is used, then an entity presents a reconciliation of profit or loss to net cash flows from operating activities; however, in our experience practice varies regarding the measure of profit or loss used. Like IFRS, cash flows from operating activities may be presented using either the direct method or the indirect method. Like IFRS, if

The purpose of this paper is to discuss the SEC’s influence on auditing a private company and the essential activities involved in the initial planning of an audit. Next the discussion will delve into four stages of the audit and tasks performed by the auditors as well as internal control findings and various aspects of the audit.

A special purpose entity (SPE) is a business interest formed in order to perform a specific task or tasks. SPE’s are also referred to as off-balance sheet arrangements. SPE’s are formed to 1). Finance certain assets or services and keeping the associated debt off the balance sheet of the sponsors, 2).Transform certain financial assets, such as trade receivables, loans, or mortgages, into liquid securities, and 3). Engage in tax-free exchanges (Saroosh, 2004). Most of the SPE’s in the U.S. have been organized as limited liability corporations (LLC). A trust is also a common SPE in the U.S.

FASB (1981).Statement of Financial Accounting Standards No. 51. Retrieved on November 7, 2011 from: http://www.fasb.org/pdf/fas51.pdf

“The total equity investment (equity investments in a legal entity are interests that are required to be reported as equity in that entity’s financial statements) at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders.”

The aim of this report is to recommend whether or not a publicly traded company has been is worth investing in. The company chosen in this case is JPMorgan & Chase which is a large financial institution. This report is going to use a financial rational formed by the analysis of various financial metrics.

FAS 123(R) 5 states that an entity should recognize services received in a share based payment transaction when those services are received. 10 states that an entity shall account for compensation cost from share-based payment transactions with employees in accordance with the fair-value-based method. Under the fair-value-based method, the cost of services received from employees in exchange for awards of share-based compensation shall be measured based on the grant-date fair value of the equity instruments issued. A10-A17 discuss the acceptable methods of calculating fair value at the grant date. The grant-date fair value of the Murray options is $6. Following the guidance in Illustration 4(a), Share Options with Cliff Vesting, of FAS 123(R), compensation expense for the years ended December 31, 2006 & 2007 is $200,000 per year (calculation attached hereto).

Some in the accounting and business community still see the positives of using SPEs after the Enron Scandal. SPEs are regularly used by biotechnology companies to finance their research and development projects by providing detailed and attractive plans to their sponsors, who are mostly publicly traded companies. The FASB fully supports SPEs because they continue to provide genuine benefits to businesses today. They also believe that SPEs protect creditors and investors by allocating the risks among the participants. SPEs are supported by businesses today that have been allowed to invest in projects that they could not have otherwise afforded (Schiff & Murray, 2004). Rao, Miller, Wang, and Byrne (2009) discuss SPEs in a positive manner because

The Chairman mentions the Bonus Share Scheme for the 190,000 employees in the statement, as the employees who partook in this will benefit from reading the annual report as the outcome of achievement for the group is due to their determination of meeting company objectives. The schemes intention is to deliver employees with an honest and extensive connection with the group’s performance and their individual pay. (Ref: Page 41)

The primary purpose of this business research report is to estimate the relevant disclosure form the latest annual report 2016 regards to PPE and whether these disclosures satisfies the CF 's objective and qualitative characteristics. This report examines and assess on how the PPE fulfills the requirements of AASB 116 and the qualitative characteristics. Results shows the PPE are mainly meeting the requirement of AASB 116. However, some detailed disclosure information on PPE need to be more comprehend and I believe it will give you a final termination.

The majority of the world’s financial audits are dominated by four major audit firms, which are known as the “Big 4” (PricewaterhouseCoopers, Ernst & Young, KPMG, and Deloitte). Prior studies suggest that these firms, on average, provide higher quality audit services and also exhibit a fee premium in comparison with their non-Big 4 audit firms; however, it is questionable that whether all these Big 4 audit firms are the same and that whether there are differences in audit quality within the Big 4.

the accrual basis of accounting). Under EAS, profit sharing to employees and board of directors is recognized as a dividend