Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Read the case study and answer the questions given below: You are a trainee accountant in your second year of training within a small practice.

image text in transcribed
image text in transcribed
Read the case study and answer the questions given below: You are a trainee accountant in your second year of training within a small practice. A more senior trainee has been on sick leave, and you are due to go on study leave. You have been told by your manager that, before you go on leave, you must complete some complicated reconciliation work. The deadline suggested appears unrealistic, given the complexity of the work You feel that you are not sufficiently experienced to complete the work alone. You would need additional supervision to complete it to the required standard, and your manager appears unable to offer the necessary support. If you try to complete the work within the proposed timeframe but fail to meet the expected quality, you could face repercussions on your return from study leave. You feel slightly intimidated by your manager, and also feel pressure to do what you can for the practice in what are challenging times. Questions: 1. Identify the relevant facts how well the manager could solve your problem. (2 marks) 2. Examine any two fundamental principles affected in this case. (1 mark) 3. Suggest all the possible courses of action that could be taken by the manager. (2 marks) Read the case study and answer the questions given below: Mrs. Noor is currently working as CFO in Oman Refinery Company, and she has worked in the company for the last 10 years. Last year she was prompted from Financial Controller to CFO due to her excellent achievement which allowed the company to generate significant profit. Mrs. Noor is generally rewarded based on five key performance indicators and two of these indicators were to increase company revenue by 6% per year and to minimize the operational expenses by 3% annually Apparently, she was able to meet these indicators and she was entitled for 1% of net profit plus bonus shares of 10,000. This year the company suffers from liquidity and financial problems. The board is worried about the likelihood of going concern. In June 2019, the internal audit department investigated the issue to find out the main causes for these critical problems. Last month, the results of audit team were that the company was involved in signing 5-year contract with Zone Company. The revenue of 5 years was accelerated and recorded in the first year of the contact by Oman Refinery Company. Zone Company collapsed last year because of financial fraud. Moreover, last year, the company intended to seek for additional bank loan from Bank Muscat, but the bank refused to grant it because the likelihood of a covenant default was too high. The uncertainty of future performance for the company is high. The bank is concerned about the money borrowed to the company. Questions: i. Identify and explain TWO symptoms of going concern for Oman Refinery Company (2 marks) Which hypothesis of positive accounting theory relevant to this case? Justify your (1 mark) How do you think the uncertainty of the company in the future could be reduced? (2marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Ch 1-14

Authors: John Wild, Vernon Richardson, Ken Shaw

1st Edition

0073346896, 9780073346892

More Books

Students also viewed these Accounting questions