...distinctions between Groupon and Indiana Telephone Company (ITC) annual reports are: • The annual report cover letters are different. Groupon Inc.’s cover letter is more detailed and provides more information about the company. • ITC’s annual report does not have a table of contents. • The amount of information in the annual reports differ substantially. ITC’s annual report consists of 22 pages while Groupon’s annual report contains 118 pages. • The ITC’s annual report begins with information listing their board of directors, officers and operating officials, while Groupon’s management information is at the end of the report. Groupon’s report discloses information regarding executive compensation and ITC does not disclose information regarding executive compensation anywhere in its report. Groupon also lists the officers’ names and ages under the employees section and gives a brief description of each of them. • Groupon has a forward-looking statement forewarning users that its financial statements contain information with risk of uncertainty. • ITC does not explain what its business is about, strategy, distribution, marketing, partners, operations, and competition. • Groupon discloses a variety of risk factors and ITC only discloses one major risk, which is monetary inflation. • ITC concentrates heavily in monetary inflation and governmental issues. • ITC’s letter to shareholders gives a short description of important facts such as lawsuits, debt, and employee relationships...
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...reading the exposure draft and the first ten comment letters from the FASB website, I argued that the exposure draft should be adopted. Before the exposure draft were issued, FASB received some respondents criticized the original dislosure requirements of loss contingencies: “a.The initial disclosure of specific information about a loss contingency often does not occur until a material accrual is recognized for that loss contingency, sometimes taking investors by surprise. b. The at least reasonably possible threshold for disclosing loss contingencies has not resulted in the disclosure of the full population of an entity’s existing loss contingencies that would be of interest to financial statement users. c. The amounts recognized in the financial statements related to loss contingencies are not transparent to users. In order to improve the disclosures about certain loss contingencies, such change of standards is necessary.” In response to this concern, the Board made two roundable discussions and got some feedback from respondents and finally issued an exposure draft stating that “An entity shall disclose qualitative and quantitative information about loss contingencies to enable financial statement users to understand all of the following: a. The nature of the loss contingencies. b.Their potential magnitude. c.Their potential timeing (if known).” It is reasonable the Board revised some proposal in insponse to the comment letters from respondents. For example, respondents argued...
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...financial statements. -Proper recognition of interest income. -Proper recognition of investment gains and losses. b. Audit Procedures that should be undertaken with respects to audit evidence; -Inspect and count securities in the company’s safe deposit box. -Examine documents in support of purchases and sales of investment securities. -Obtain a client representation letter. - Verify the calculation equity method income. c. Audit Procedures that should be undertaken with respect to obtaining evidence against bass - Inspect and count securities in the company’s safe deposit box. - Examine documents in support of purchases and sales of investment securities. - Obtain a client representation letter. - Verify the calculation equity method income. d. Audit Procedures that should be undertaken about classification; -Study written records of investment strategies. - Review instructions to portfolio managers. -Study the company’s cash flow forecasts. -Determine the company’s financial position, working capital requirements. e. Fair market value about the portfolio; - Determine whether the securities are actively...
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...regulation in order to restore confidence in the securities market and to provide reliable and accurate information for investors. The Sarbanes Oxley Act of 2002 was a large stepping stone in that movement and has impacted many public companies. SOX requires public companies registered with the Securities Exchange Commission to evaluate the effectiveness of its internal control over financial reporting and disclose this information in its financial statements. For instance, Dell Inc., a large multinational IT corporation, was one of the many large corporations affected by the implications of SOX. First, Section 404 of SOX requires Dell’s management, under the supervision of the CEO and CFO, to establish and maintain adequate internal control in accordance with the rules defined in the Securities Exchange Act. In addition to establishing the controls, they are also required to evaluate the effectiveness of the controls against the criteria established in the Internal Control-Integrated Framework issued by COSO. Second, Section 409 of SOX requires management to disclose material changes in internal control, and the results or potential effects of those changes. Finally, Section 404 of SOX requires Dell’s auditing firm to evaluate management’s assessment of Dell’s internal control and to issue an opinion on the quality and accuracy of the assessment. All in all, SOX raised corporate responsibility to assess and improve internal control over financial reporting. It also...
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...Agency: Real Estate under Virginia’s Agency Law Code of Virginia Agency Law § 54.1-2130. Definitions. As used in this article: "Agency" means every relationship in which a real estate licensee acts for or represents a person by such person's express authority in a real estate transaction, unless a different legal relationship is intended and is agreed to as part of the brokerage relationship. Nothing in this article shall prohibit a licensee and a client from agreeing in writing to a brokerage relationship under which the licensee acts as an independent contractor or which imposes on a licensee obligations in addition to those provided in this article. If a licensee agrees to additional obligations, however, the licensee shall be responsible for the additional obligations agreed to with the client in the brokerage relationship. A real estate licensee who enters into a brokerage relationship based upon a written contract which specifically states that the real estate licensee is acting as an independent contractor and not as an agent shall have the obligations agreed to by the parties in the contract, and such real estate licensee and its employees shall have no obligations under §§ 54.1-2131 through 54.1-2135 of this article. "Brokerage relationship" means the contractual relationship between a client and a real estate licensee who has been engaged by such client for the purpose of procuring a seller, buyer, option, tenant, or landlord ready, able, and willing...
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...Overseas companies registered in the UK GPO1 March 2015 Companies Act 2006 Is this guidance for you? This guide will be relevant to you if: • you are an overseas company thinking of opening a UK establishment • you are an overseas company with a UK establishment looking for basic guidance on your continuing filing and disclosure obligations • you act as an adviser to an overseas company and are looking for guidance on registration and disclosure requirements in the UK GPO1 March 2015 – Version 3.1 Companies Act 2006 Page 2 of 22 Contents Introduction Chapter 1. Who needs to register? Chapter 2. Registration Chapter 3. Delivery requirements Chapter 4. Changing the accounting reference date or accounting requirements Chapter 5. Disclosure requirements Chapter 6. Insolvency, winding up and closure Chapter 7. Quality of documents Chapter 8. Further information This guide answers many frequently asked questions and provides information on completing the most commonly used filings relating to this area. The guide is not drafted with unusual or complex transactions in mind. Specialist professional advice may be needed in those circumstances. GPO1 March 2015 – Version 3.1 Companies Act 2006 Page 3 of 22 Companies Act 2006 Introduction This guide explains how to register an overseas company that opens an establishment in the UK. It also provides guidance on the disclosure obligations ...
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...The Corporate Governance Principles and Recommendations Principle 1 – Lay solid foundations for management and oversight Companies should establish and disclose the respective roles and responsibilities of board and management. • Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions. • Box 1.1: Content of a director’s letter upon appointment • Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives. • Recommendation 1.3: Companies should provide the information indicated in the Guide to reporting on Principle 1. Principle 2 - Structure the board to add value Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties. • Recommendation 2.1: A majority of the board should be independent directors. • Box 2.1: Relationships affecting independent status • Recommendation 2.2: The chair should be an independent director. • Recommendation 2.3: The roles of chair and chief executive officer should not be exercised by the same individual. • Recommendation 2.4: The board should establish a nomination committee. • Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. • Recommendation 2.6: Companies should provide the information indicated in the Guide to reporting...
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...of the written representations he made to the IRS when he prepared and submitted his client’s returns, 4) failing to exercise due diligence in making representations to the IRS during an audit, and 5) failing to disclose to his clients that they could avoid penalties associated with their tax positions. B. Kaskey failed to initially respond to the complaint by OCR. C. Kaskey did not appear at the administrative proceeding before the Administrative Law Judge. D. Kaskey’s excuse was that he had an ongoing medical condition that prevented him from filing his own federal income tax returns. E. Kaskey argued that he failed to perform due diligence because the errors in his clients’ tax returns were the result of his clients misrepresenting facts to him. F. The following particular facts were persuasive to the Appellate Authority relating to Kaskey’s appeal: the taxpayer’s reported wages did not match the corporation’s reported officer compensation even though they were the sole officers of the corporation. Also, the corporate books clearly indicated that the taxpayers had expensed personal items through the corporation without reporting loans or distributions reflecting the payments. 2. Discussion question #5 at the end of Chapter 4 asks if you disclose errors to an agent when representing a taxpayer when you know there are substantial errors in the return. Circular 230 10.21 says that you must advise...
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...EXECUTIVE COMPENSATION DISCLOSURE HANDBOOK: A Practical Guide to the SEC’s Executive Compensation Disclosure Rules Perkins Coie LLP Danielle Benderly Susan Daley Iveth Durbin Sue Morgan Kelly Reinholdtsen Executive Compensation Disclosure Handbook: A Practical Guide to the SEC’s Executive Compensation Disclosure Rules REVISED MAY 2010 Danielle Benderly Susan Daley Iveth Durbin Sue Morgan Kelly Reinholdtsen RR DONNELLEY Copyright RR Donnelley, 2010 (No claim to original U.S. Government works) All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the authors and publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a professional should be sought. Printed in the United States of America. RR DONNELLEY About RR Donnelley Financial Services Group As the world’s largest provider of integrated communications, RR Donnelley successfully leverages our global platform, industry leading service organization and enduring financial stability to help our clients achieve their goals. With over 145 years of...
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...What’s Wevenue? Case Study Coopers & Lybrand was auditing Cal Micro at the time the latter company wrote off half of its accounts receivable. The move sparked an internal investigation and the Securities and Exchange Commission (SEC) sought to bar the two auditors working with Cal Micro from signing off on public company audits. On one hand, the SEC pointed to several weaknesses in the auditors’ performance of their jobs, while on the other the auditors claimed ignorance and even alleged a willful cover-up on the part of Cal Micro (MacDonald, 2000). At issue in the dispute was Cal Micro’s failure to establish a guideline for when a transaction could be treated as a sale. The chief accountant of Cal Micro at the time testified that the auditors were asked, and actually approved Cal Micro’s practice of booking revenue on products sold but shipped after the close of the fourth quarter in June 1990 (MacDonald, 2000). Managers also booked revenue “for products shipped before customers even wanted them; they often didn’t reverse sales when customers returned goods; and they paid distributors ‘handling fees’ to accept products that sometimes had unlimited rights of return, then booked the products as sales” (MacDonald, 2000). Ultimately, this resulted in 70% of quarterly revenue in Spring 1994 being fake, and led to Cal Micro’s decision to write-off half of the accounts receivable (MacDonald, 2000). Coopers & Lybrand was performing an annual audit at the time, and deployed...
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...A Letter from Prison: Background: Introduction to Accounting Ethics. Reading Assignment: The case Summary of Sarbanes-Oxley (2nd page of this document) Pages 18-19 of the text. Assignment Questions: 1. What did Stephen Richards and other members of Computer Associates management do? 2. What impact did these actions have on financial statement users? 3. What were the motivations for these actions? 4. Do you believe the actions taken by Richards and other members of Computer Associates' management are acceptable or cross the line into unethical or illegal behavior? Provide reasons for your answer. 5. What other actions could Computer Associates have taken to achieve its financial reporting objectives. For each alternative action, assess whether you believe it is acceptable or whether it crosses the line into unethical or illegal behavior. 6. What actions can other companies take to avoid the same outcome as Computer Associates? 7. Suppose you faced the same pressure as Stephen Richards to extend the fiscal quarter. How would you respond and what would be the expected consequences? 1 The Sarbanes-Oxley Act (2002) a. also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or Sarbox; b. enacted on July 30, 2002 in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, and WorldCom. c. The Act establishes a new quasi-public agency, the Public Company...
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...A California appellate court recognized Ernst & Whinney not liable to Union Bank of California which allegedly relied on Ernst’s review report in extending $ 7 million to ZZZZ Best Co. I agree with court’s decision because Ernst & Whinney never issued an audit opinion on financial statements it was just a review report which was disclosed. However, I do not justify Ernst & Whinney because the auditors besides from failure to notice ‘red flags’ had done few mistakes which lead to the law suit. The first mistake that the auditors made involved Mr. George Greenspan during the 1986 audit. This was the first audit since ZZZZ Best became a public company and the mistake involved the inspection of the insurance restoration sites. Mr. Greenspan had talked with Tom Padgett, and Mr. Padgett confirmed the insurance contracts were real and showed proper documents to back them up, Mr. Greenspan never actually inspected any of the actual insurance restoration sites. Doing so could have stopped the scam from hurting the public stockholders, especially because they take in such a huge percentage of income for ZZZZ Best. The second mistake involved Ernst & Whinney, was that Greenspan reported during the interview to the congressional subcommittee, that Ernst & Whinney never got in touch with him to talk about ZZZZ. If this conversation occurred, Greenspan might have been able to discuss his neglection to inspect the insurance restoration sites, which therefore could have given Ernst & Whinney...
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...Application letters Make sure your correspondence with potential employers is effective - see our examples Types of application letter • Speculative letters are sent as part of a speculative application, together with a CV. • Covering letters accompany an application form or CV for an advertised job vacancy. • A letter of application is sometimes sent, rather than an application form or CV, in which case the letter should include the information you would put in a CV but presented in sentences and paragraphs. Speculative letter A speculative letter should sound positive and enthusiastic. It should be clearly structured to cover • the kind of work you’re looking for • why you want to work for that organisation in particular • why you are suitable - emphasise your relevant skills, experience and personal qualities by highlighting particular information in your enclosed CV. • tailored to the specific organisation rather than a standard letter used for a number of speculative applications • addressed to a named individual. Telephone the organisation and ask if you’re not sure who to send it to. Try to offer a number of options in your letter. If they have no vacancies, could they keep your details on file? Are you interested in unpaid work experience or an information interview as well? If so, say so. Example speculative letter An example speculative letter (PDF, 10KB) Covering letter Your covering letter is as important as the CV or...
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...company or are using an in-house affiliate called a debt collector to attempt to get you to pay. Third party collectors often purchase your debt for less than you owe, and your debt is now owned by the collector. A collector may also work for the creditor in return for a fee or a percentage of any money collected. In-house collectors that are affiliated with the original creditor work on behalf of the company directly. Because the creditor has taken a loss on your account or because you are late with making payments, this negative information may show up on your credit report. Often the first contact with the debt collector is a telephone call from a representative, a prerecorded message asking you to call a mysterious toll-free number, or a letter. When a collector calls or you call back, get as much information as possible. Ask for the name of the caller, the collection agency, the creditor, and the address and fax number for sending correspondence. Also ask about the amount the collector claims you owe. In this first call, you should also tell the caller you...
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...PROFESSIONAL ETHICS AND CODE OF CONDUCT The Institute of Cost and Management Accountants of Bangladesh ICMA Bhaban, Nilkhet, Dhaka-1205. C:\Documents and Settings\All Users\Documents\Code-of-ethics-Rashid.doc Page 1 of 22 Foreword The Institute of Cost and Management Accountants of Bangladesh (ICMAB) is pleased to publish the Professional Ethics and Code of Conduct in a book-let form. For continued growth and development of the profession, professional ethics and code of conduct is a pre-requisite. No profession can develop and can enhance its acceptability in the society without having its ethics and code of conduct. We hope that this will definitely enhance the importance and image of the profession and member of the Institute shall be bound to follow this ethics & code of conduct. Despite many twists and turns in the global economic scenario we have tried our best to keep up with the ever –changing economic events taking place within and outside our country particularly in the social, economic, financial and corporate environment. Our role and responsibility as Cost and Management Accountants and also as Cost Auditor has increased manifold requiring enhancement of our knowledge, skill and efficiency to face the challenges of dynamic business environment, where ethics & code of conduct can help perform our duties with more perfection and satisfaction. Md. Abdul Aziz, FCMA President ICMAB C:\Documents and Settings\All Users\Documents\Code-of-ethics-Rashid...
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