1. Answer the following questions concerning an expert witness:

(5 marks)

Question

Answer

What is an expert witness? Give an example where an accountant could act in this role.

(1 mark)

To whom does an expert witness owe a duty?

(.5 mark)

Why is a single expert witness preferred by the court?

(.5 mark)

You are an accountant, and have been appointed as an expert witness in a court case. You are asked to give an opinion on the companys compliance with certain environmental protection laws and chemical treatment of waste. With reference to the Makita case, would your evidence be admissible? Explain.

(3 marks)

Question 4 continued next page

Question 4 (contin.)

2. What 5 major conclusions can be drawn from the ratios below about the companys future? Explain.

(5 marks)

Ratio	20X9	20X8	20X7	20X6	20X5
Current ratio	2.08	2.26	2.51	2.43	2.50
Quick ratio	.97	1.34	1.82	1.76	1.64
Profit before taxes divided by interest expense	3.50	3.20	4.10	5.30	7.10
Days to collect receivables	108.20	83.10	105.20	80.60	71.60
Days to sell inventory	172.60	195.10	133.90	107.80	108.30
Net profit divided by ordinary equity	.05	.06	.10	.10	.11

Question 4 continued next page

Question 4 (continued)

No.	Major conclusions about the companys future explain with reference to the relevant ratio(s)
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