FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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The annual report is a regular activity of public firms and is sent to current owners (shareholders) and the SEC, and is also made available to prospective owners, financial analysts, and others interested in a company’s performance. Name four of the major sections contained. Please discuss the benefits and limitations of the information provided in this report.
The directors of Glowball, a public limited company, had discussed the study by the Institute of Environmental Management which indicated that over 35% of the world's largest 250 corporations are voluntarily releasing green reports to the public to promote corporate environmental performance and to attract customers and investors. They have heard that their main competitors are applying the 'Global Reporting Initiative' (GRI) in an effort to develop aworldwide format for corporate environmental reporting. However, the directors are unsure as to what this initiative actually means. Additionally, they require advice as to the nature of any legislation or standards relating to environmental reporting, as they are worried that any environmental report produced by the company may not be of sufficient quality and may detract and not enhance their image if the report does not comply with recognized standards. Glowball has a reputation for ensuring the preservation of the environment in its…
Consider yourself the financial controller of Alpha. The managing director, who is not an accountant, has recently attended a seminar and has raised the following questions for you concerning issues discussed at the seminar:The notes to the financial statements say that plant and equipment is held under the ‘cost model’. However, property which is owner occupied is revalued annually to fair value. Changes in fair value are sometimes reported in profit or loss but usually in ‘other comprehensive income’. Please explain how all these treatments comply with relevant reporting standards. The manager director also added “I wonder how the revaluation model can affect the information relevancy and reliability”
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- Consider yourself the financial controller of Alpha. The managing director, who is not an accountant, has recently attended a seminar and has raised the following questions for you concerning issues discussed at the seminar: The notes to the financial statements say that plant and equipment is held under the ‘cost model’. However, property which is owner occupied is revalued annually to fair value. Changes in fair value are sometimes reported in profit or loss but usually in ‘other comprehensive income’. Please explain how all these treatments comply with relevant reporting standards. The manager director also added “I wonder how the revaluation model can affect the information relevancy and reliability”. Required: Provide answers to the queries raised. You should justify your answers with reference to relevant IFRS Standards and academic literature.arrow_forwardConsider yourself the financial controller of Alpha. The managing director, who is not an accountant, has recently attended a seminar and has raised the following questions for you concerning issues discussed at the seminar: The notes to the financial statements say that plant and equipment is held under the ‘cost model’. However, property which is owner occupied is revalued annually to fair value. Changes in fair value are sometimes reported in profit or loss but usually in ‘other comprehensive income’. Please explain how all these treatments comply with relevant reporting standards. The manager director also added “I wonder how the revaluation model can affect the information relevancy and reliability”.arrow_forwardRichardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans.InstructionsIf your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses tothe following. Provide Codification references for your responses. (a) Identify the authoritative literature that addresses the accounting for share-based payment compensation plans.(b) Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?(c) The Richardson Company board is also considering an employee…arrow_forward
- Every annual report of a public company includes an extensive discussion and analysis provided by thecompany’s management. Specifically, which aspects of the company must this discussion address? Isn’tmanagement’s perspective too biased to be of use to investors and creditors?arrow_forwardKaren Sepan, a recent graduate of the local state university, is presently employedby a large manufacturing company. She has been asked by Jose Martinez, controller, to prepare the company’s response to a current Preliminary Views published by the Financial Accounting Standards Board (FASB). Sepan knows that the FASB has a conceptual framework, and she believes that these concept statements could be used to support the company’s response to thePreliminary Views. She has prepared a rough draft of the response citing the objective of financial reporting. Instructions(a) Identify the objective of financial reporting.(b) Describe the level of sophistication expected of the users of financial information by the objective of financial reporting.arrow_forwardChoose a not-for-profit organization of interest to you, and locate its annual report or financial statements. Annual reports can usually be found on the organization's website. Note: If you have difficulty finding some organizations or the annual reports or financials, contact your instructor for assistance. Find the line item totals for the following in the financial statements/annual report: Total revenue, Program service expenses, and Total expenses. Calculate the ratio of the program service expenses to the total expenses. Post your findings on the discussion board along with your evaluation of the organization's effectiveness--based on the calculated ratio, do you believe they are managing their expenses well? In responding to your peers, would you feel comfortable donating to the organization (based on their ratio, not necessarily other aspects of their work). Why or why not?arrow_forward
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- 14 Which of the following is an example of a direct engagement? Group of answer choices a. Omega Company hired Manjean to express an opinion on the financial statements of Omega Company which was prepared by another firm on behalf of Omega Company. b. Butters, CPA was hired to issue an assurance report on sustainability practices of Blacklist Corporation. Butters will evaluate the sustainability practices of Blacklist Corporation and issue a report on it. c. Mara was engaged to issue an opinion on the financial statements prepared by Onic Corporation. d. Chantelle is engaged to provide assurance on the total proven reserves of an oil company. The company measures its reserves and prepares a report available to intended users.arrow_forwardPlease answer this. Thank you! Name one company (which can be a publicly listed, public company, registered issuer, non-stock, non-profit corporation, partnership, sole proprietor, and yes, even the sari-sari store of your neighbor), and illustrate the inter-relationship of Governance, Risk Management, and Control in your chosen company. Moreover, you may opt to design a simple one-line audit plan on how will you evaluate the Governance, Risk Management, and Control of your chosen company.arrow_forwardCorporate sustainability reports vary greatly across companies and industries. Select two companies that interest you and conduct an online search to find their corporate sustainability report. (If one or both of the companies you selected do not issue a corporate sustainability report, then select a different company that does issue such a report.) You can either scroll through the corporate sustainability reports for the two companies you selected or you can download them onto your computer and scroll through the downloaded reports. Note: Completing the requirements under this task by answering from the perspective of an BS Accounting Information System student, is highly encouraged. Required: 1. Identify and briefly explain three similarities between the two corporate sustainability reports. 2. Identify and briefly explain three differences between the two corporate sustainability reports. 3. What do you believe is the greatest strength of each corporate sustainability…arrow_forward
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