Darwish works as a Chartered Accountant with Gemilang World Berhad, a firm listed on Bursa Malaysia. At the same time, he registers for two years' professional examination papers of ICAEW. His works basically deals with keeping financial records of the company. Besides that, he is also responsible in awarding large maintenance contracts services to local contractors. At one time, when his company was seeking for a new contractor for a new maintenance services, without inviting other tenders, he simply accepted a bid from one contractor who promised to pay him RM15,000 as a gift once the contract was awarded to them.
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- Magi Chen is the managing director of Sun Construction Pty Ltd, a family owned business that provides construction services. As Magi is interested in purchasing some new construction equipment’s for her business, she has approached her local bank for finance. The bank has asked that Magi provide an audited financial statement to assist them in considering her loan application. Magi has approached your audit firm for this service and you have been allocated the task of auditing Sun Construction for the year ended 30 June 2019. You have undertaken a preliminary review of the business and determined that a substantive testing approach would be suitable and appropriate. You are currently preparing an audit program for the revenue cycle. The following information has been obtained from your review:• Magi usually works 120 hours a fortnight. Part of this time is spent travelling between different clients and is not charged to the clients. The remaining time is charged at $60 per hour,…You are a sole practitioner who used to provide a range of accountancy services for a small company(Company A) that owns a hardware shop in the town where you practice. Following a briefretendering process, the client chose to engage an alternative firm of accountants. Both you and theother firm had been asked to tender for a range of services, including the preparation of year-endaccounts, tax compliance work, and a due diligence exercise in respect of the intended purchase ofa small hardware business in the neighboring town. You believe that you were unsuccessful in thetendering process on the basis of cost alone, as Company A is not very profitable, and suffers fromthe competition of the other hardware business that it intends to acquire. You are the continuityprovider for another local sole practitioner. Two months ago, he suffered a heart attack, and so you are currently acting for a number of hisclients. He is not expected to resume practicing for another two months. One of the…Gail is a director in a regional bank. As part of her director’s duties, she has to review financial statements and other reports from the Chief Financial Officer prior to the bank’s board meetings. Gail has a degree in economics and has worked in banking for many years, however, since becoming a director she believes accounting knowledge would assist her carry out her duties. Gail incurred various costs in undertaking a Bachelor of Commerce in professional accountancy with the University of Southern Queensland. During the year ending 30 June 2021 Gail incurred the following costs related to the course: HELP fees $2,600 Stationery $180 Textbooks $220 Expenses of travelling between her job and USQ where the course was being held $120 Required: Discuss whether any amounts of expenditure incurred by Gail would be allowable as a deduction during the year ended 30 June 2021 under any section of the Income Tax Assessment Acts. Support your discussion with reference to legislation,…
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- You are an accountant working for a manufacturing company that makes personal care products and has recently decided to incorporate. The company incurred a total of $7,900 for attorneys fees, promotion costs, and filing fees with the state of incorporation as a part of organizing the corporate entity. What is the journal entry to record these costs on February 28, assuming they are paid in cash?Ray, the owner of a small company, asked Holmes, CPA, to conduct an audit of the company’s records. Ray told Holmes that the audit must be completed in time to submit audited financial statements to a bank as part of a loan application. Holmes immediately accepted the engagement and agreed to provide an auditor’s report within three weeks. Ray agreed to pay Holmes a fixed fee plus a bonus if the loan was granted. Holmes hired two accounting students to conduct the audit and spent several hours telling them exactly what to do. Holmes told the students not to spend time reviewing the controls but to concentrate on proving the mathematical accuracy of the ledger accounts and to summarize the data in the accounting records that support Ray’s financial statements. The students followed Holmes’ instructions and after two weeks gave Holmes the financial statements, which did not include footnotes because the company did not have any unusual transactions. Holmes reviewed the statements and prepared an unqualified auditor’s report. The report, however, did not refer to GAAP or to the year-to-year application of such principles. Briefly describe each of the ten standards included in the PCAOB guidance and indicate how the action(s) of Holmes resulted in a failure to comply with each standard.Mary Tan is the controller for Duck Associates, a property management company in Portland, Oregon. Each year, Tan and payroll clerk Toby Stock meet with the external auditors about payroll accounting. This year, the auditors suggest that Tan consider outsourcing Duck Associates’s payroll accounting to a company specializing in payroll processing services. This would allow Tan and her staff to focus on their primary responsibility: accounting for the properties under management. At present, payroll requires 1.5 employee positions—payroll clerk Toby Stock and a bookkeeper who spends half her time entering payroll data in the system. Tan considers this suggestion, and she lists the following items relating to outsourcing payroll accounting: The current payroll software that was purchased for $4,000 three years ago would not be needed if payroll processing were outsourced. Duck Associates’s bookkeeper would spend half her time preparing the weekly payroll input form that is given to the…
- The same accounting assistant has encountered the following matter during the preparation of the draft financial statements of Arusha for the year ended 20 September 2021. He has given an explanation of his treatment of them. Arusha signed a contract (for an initial three years) in August 2021 with a company called Media Today to a install a satellite dish and cabling system to a newly built group of residential apartments. Media Today will provide telephone and television services to the residents of the apartments via the satellite system and pay Arusha 50,000ZMW per month from December 2021. Work on the installation commenced on 1 September 2021 and expenditure to 30 September 2021 was 58,000ZMW. The installation is expected to be completed by 31 October 2021. Previous experience with similar contracts indicates that Arusha will make a total profit of 40,000ZMW over the three years on this initial contract. The assistant correctly recorded the costs to 30 September 2021 of 58,000…Sia, a CPA, is employed as accounting professor in a University. On the side, she also provides accounting services to selected clients. One of these clients was so impressed with her that she was made a consultant for one of companies enganged in agri-business. For 2018, she received the following income: Salary form the University, net of CWT of P42,000 268,000 13th month pay received form the University 95,000 Monetized unused vacation leave credits (10 days) 50,000 Employee longevity award, tangible with monetary value of 10,000 Fees received as consultant, gross of 10% CWT 80,000 Professional fees from clients, net of 15% CWT 850,000 Damages won in a defamation suit filed against her ex-boyfriend 8,0000,000 Capital gains from the saleof jewelry bought in 2000 100,000 How much is Sia's taxable compnesation…Mary Tan is the controller for Duck Associates, a property management company in Portland, Oregon. Each year, Tan and payroll clerk Toby Stock meet with the external auditors about payroll accounting. This year, the auditors suggest that Tan consider outsourcing Duck Associates’ payroll accounting to a company specializing in payroll processing services. This would allow Tan and her staff to focus on their primary responsibility: accounting for the properties under management. At present, payroll requires 1.5 employee positions: payroll clerk Toby Stock and a bookkeeper who spends half her time entering payroll data in the system. Tan considers this suggestion, and she lists the following items relating to outsourcing payroll accounting: a. The current payroll software that was purchased for $4,000 three years ago would not be needed if payroll processing were outsourced. b. Duck Associates’ bookkeeper would spend half her time preparing the weekly payroll input form that is…