Question 1
1. Which of the following presumptions is correct about the reliability of evidential matter? a)Information obtained indirectly from outside sources is the most reliable evidential matter. b)To be reliable, evidential matter should be convincing rather than persuasive. c)Reliability of evidential matters refers to the amount of corroborative evidence obtained. d)Effective internal control provides more assurance about the reliability of evidential matter. 2. Which of the following statements relating to the appropriateness of evidential matter is always true? a)Evidential matter gathered by an auditor from outside an enterprise is reliable. b)Accounting data developed under satisfactory conditions of internal control are more relevant than data developed under unsatisfactory internal control conditions. c)Oral representations made by management are not valid evidence. d)Evidence gathered by auditors must be both valid and relevant to be considered appropriate. 3. In evaluating the reasonableness of an accounting estimate, an auditor most likely would concentrate on key factors and assumptions that are a)Consistent with prior periods. b)Similar to industry guidelines. c)Objective and not susceptible to bias. d)Deviations from historical patterns. 4. Which of the following is least likely to be a factor in the auditor?s decision about the extent of the documentation of a particular audit area? a)The risk of material misstatement. b)The extent of the judgment involved in performing the procedures. c)The nature and extent of exceptions identified. d)Whether or not the client has an internal audit function. 5. Which of the following is an example of fraudulent financial reporting? a)Company management changes inventory count tags and overstates ending inventory, while understating cost of goods sold. b)The treasurer diverts customer payments to his personal due, concealing his actions by debiting an expense account, thus overstating expenses. c)An employee steals inventory and the ?shrinkage? is recorded in cost of goods sold. d)An employee steals small tools from the company and neglects to return them; the cost is reported as a miscellaneous operating expense. 6. Which of the following best describes what is meant by the term ?fraud risk factor?? a)Factors whose presence indicates that the risk of fraud is high. b)Factors whose presence have often been observed in circumstances where frauds have occurred. c)Factors whose presence requires modification of planned audit procedures. d)Reportable conditions identified during an audit. 7. Which of the following characteristics most likely would heighten an auditor?s concern about the risk of intentional manipulation of financial statements? a)Turnover of senior accounting personnel is low. b)Insiders recently purchased additional shares of the entity?s stock. c)Management places substantial emphasis on meeting earnings projections. d)The rate of change in the entity?s industry is slow. 8. Which of the following statements reflects an auditor?s responsibility for detecting misstatements due to errors and fraud? a)An auditor is responsible for detecting employee errors and simple fraud, but not for discovering fraud involving employee collusion or management override. b)An auditor should plan the audit to detect misstatements due to errors and fraud that are caused by departures from the applicable financial reporting framework. c)An auditor is not responsible for detecting misstatements due to errors and fraud unless the application of GAAS would result in such detection. d)An auditor should design the audit to provide reasonable assurance of detecting misstatements due to errors and fraud that are material to the financial statements. 10. Under Statements on Auditing Standards, which of the following would be classified as an error? a)Misappropriation of assets for the benefit of management. b)Misinterpretation by management of facts that existed when the financial statements were prepared. c)Preparation of records by employees to cover a fraudulent scheme. d)Intentional omission of the recording of a transaction to benefit a third party.,I just need the know the correct answer. There is no need for explanation.,Thank you so much Michael, we will be working in future again. I appreciate your great effort,How confident are you about Question # 3?. My eyes keep going on Choice A. I am sure you know it better than me just assurance. Also, thank you so much for your help and hope to work with you soon
Question 2
Note: For this assignment, use the sample you collected for Assignment 1 Problems: Note: All problems are independent of each other, unless otherwise indicated. This means that you must show a complete solution for each problem. 1. (25 points) Using the traditional method, test a claim about the mean of your population at a 0.05 level of significance. 2. (25 points) Using the traditional method, test a claim about the standard deviation of your population at a 0.05 level of significance 3. (25 points) Repeat Problem 1 using the p-value method. 4. (25 points) Repeat Problem 2 using the p-value method. Note: Data from assignment one is below. Sample Number= 31 ? (sample score)=4559 Sample Mean= 147.06 Standard Deviation= 44.70 CV= 44.70/147.06= 0.31 (after rounding up??) Traditional Method 1. State the null hypotheses. 2. State the alternate hypothesis. 3. State the significance level. 4. Find the critical value(s) CV. 5. Compute the test statistic TS. 6. Make a decision. 7. State conclusion. P-value Method 1. State the null hypotheses. 2. State the alternate hypothesis. 3. State the significance level. 4. Compute the test statistic TS. 5. Find p-value 6. Make a decision. 7. State conclusion Computing p-value for t-test using MS EXCEL: Steps 1. In EXCEL, click any cell (ie, A1 cell). 2. Depending on your hypothesis test, type one of the formulas shown below: =tdist(-t,df,1) for left-tail test =tdist(t,df,1) for right-tail test =tdist(t,df,2) for two-tail test Notes 1. EXCEL has different notation for t and df. 2. Don't forget to start a formula with an "=" sign. 3. The p-value cannot be negative or greater than 1. Computing p-value for Chi-Square test using MS EXCEL: Steps 1. In EXCEL, click any cell (ie, A1 cell). 2. Depending on your hypothesis test, type one of the formulas shown below: =1-chidist(?2,df) for left-tail test =chidist(?2,df) for right-tail test =2*(1-chidist(?2,df)) for two-tail test if ?2 falls near left tail. =2*chidist(?2,df) for two-tail test if ?2 falls near right tail. Notes 1. EXCEL has different notation for ?2 and df. 2. Don't forget to start a formula with an "=" sign. 3. The p-value cannot be negative or greater than 1.
Question 3
Velocity Cellular In conjunction with quarterly review procedures, the controller of Velocity Cellular Services (Velocity or the Company) provided the audit engagement team with background information about the Company?s promotion of its new prepaid phone service plan. The controller also provided the engagement team with an accounting memo discussing the Company?s new plan. MEMO To: Audit Engagement Team From: Controller, Velocity Cellular Services Subject: Accounting for New Prepaid Phone Service Plan Date: August 31, 2008 Velocity Cellular Services (Velocity or the Company) sells wireless services and products based on the Global System for Mobile Communications (GSM) standard. Under the GSM standard, each subscriber is required to have an activation card to access the network; the activation card is therefore necessary for subscribers to use their cellular phones. The activation card identifies the subscriber, provides the subscriber with a unique phone number, and only works on a specific carrier?s network (i.e., the activation card is not interchangeable with other carrier networks). The Company is planning to promote and market a prepaid phone service plan called ?Power Starterpack? as part of its line of service plans to existing wireless subscribers (i.e., individuals who already own a cellular phone). The Company adopted ASU 2009-13, ?Revenue Arrangements With Multiple Deliverables? in the current fiscal year. Power Starterpack ? Prepaid Phone Service Plan The Power Starterpack will provide each subscriber with a new activation card and a prepaid voucher for a total nonrefundable fee of $200. By replacing the old activation card with the updated 2008 activation card, the following additional functionalities are provided: ? Bluetooth?-enabled technology that allows current subscribers to have wireless control of and communication between their existing cellular phone and a hands-free headset (hands-free headset is sold separately). ? Technology that enables the existing cellular phone to make international phone calls. The older activation cards limited existing cellular phones to domestic calls. Copyright 2007 Deloitte Development LLC All Rights Reserved. Case 09-1: Velocity Cellular Page 2 Copyright 2007 Deloitte Development LLC All Rights Reserved. ? Additional memory for the subscriber?s existing cellular phone provides storage for an additional 300 names and phone numbers. When they purchase a Power Starterpack, subscribers are required to return the old activation card to the Company and install the new activation card in their existing cellular phones. Also included in the purchase of the Power Starterpack is a prepaid voucher that gives the subscriber an airtime window of 360 days to use $50 worth of minutes. However, if there is no activity for a consecutive period of seven months, the subscriber?s account is terminated (including the assigned phone number) and no refund is given. Additional prepaid vouchers are available in $50, $100, $150, and $200 increments. Replacement Activation Cards Current subscribers can also purchase a new activation card if an existing activation card is lost, malfunctions, or new functionalities are needed on the subscriber?s existing cellular phone. New activation cards can be purchased on a standalone basis directly from Velocity. The same model activation cards, with the same additional functionalities as those sold in the Power Starterpack, can also be purchased through other independent wireless phone retailers. Standalone transactions for new activation cards are infrequent and typically stem from owners of old activation cards who need to upgrade to new activation cards when new phones are purchased. There are no general rights of return held by the subscriber relative to the delivered item contained in the prepaid plan. Required: ? Refer to current, relevant accounting guidance to determine and support the appropriate method for recognizing revenue for the Power Starterpack.
Question 4
1. Mark sexton and todd story, the owner of S&S Air,Inc.,were impressed by the work Chris had done on financial planning. using Chris's analysis, and looking at the demand for light aircraft, they have decided that their existing fabrication equipment is sufficient, but it is time to acquire a bigger manufacturing facility. Mark and Todd have identified a suitable structure that is currently for sale, and they believe they can buy and refurbish it for about $22million. Mark, Todd and Chris are now ready to meet with Christie Vaughan, the loan officer for First United National Bank. The meeting is to discuss the mortgage option available to the company to finance the new facility Christie beings the meeting by discussing a 30-year mortgage. The loan would be repaid in equal monthly installments. Balance of the previous relationship between S&S Air and the bank, there would be no closing cost for the loan. Christie states that the APR of the loan would be 6.1 percent. Todd asks if a shorter mortgage loan is available. Christie says that the bank does have a 20-year mortgage available at the same APR. Mark decides to ask Christie about a "smart loan" he discussed with a mortgage broker when he was refinancing his home loan. A smart loan works as follows :Every two weeks a mortgage payment is made that is exactly one-half of the traditional monthly mortgage payment. Christie informs him that the bank does have smart loans. The APR of the smart loan would be the same as the APR of the traditional loan. Mark nods his head. He then states this is the best mortgage option available to the company since it saves interest payments. Christie agrees with mark but the suggests that a bullet loan, or balloon payment, would result in the greatest interest savings. At todd's prompting, she goes on to explain a bullet loan. The monthly payments of a bullet loan would be calculated using a 30-year traditional mortgage. In this case, there would be a a 5 year bullet. This would mean that the company wouls make the mortgage payments for the traditional 30-year mortgage for the first five years, but immediately after the company makes the 60th payment, the bullet payment would be due. The bullet payment is the remaining principal of the loan. Chris then ask how the bullet payment is calculated. Christie tells him that the remaining principal is calculated using an amortization table, but is is also the present value of the remaining 25 years of mortgage payments for the 30-year mortgage. todd has also heard of an interest-only loan and ask if this loan s available and what the terms would be. Christie says that the bank offers an interest-only loan with a term of 10 years and an APR of 3.5 percent. she goes on to further explain the terms. the company would be responsible for making interest payment each monthly on the amount borrowed. No principal payments are required. At the end of the 10-year term, the company would repay the $22 million. However, the company can make principal payment at any time. The principal payment would work just like those on a traditional mortgage. principal payments would reduce the principal of the loan and reduce the interest due on the next payment. mark and Todd are satisfied with Christie's answer, but they are still unsure of which loan they should choose. They have asked Chris to answer the following questions to help them choose the correct mortgage. A. What are the monthly payments for a 30-year traditional mortgage? What are the payments for a 20- year traditional mortgage? B. Prepare an amortization table for the first six month of the traditional 30-year mortgage. How much of the first payment goes toward principal. C . How long would it take for S&S Air to pay off the smart loan assuming 30-year traditional mortgage payments? Why is this shorter than the time needed to pay off the traditional mortgage? How much interest would the company save? D. Assume S&S Air takes out a bullet loan under the terms described. what are the payments on the loan? E. Which mortgage is the best for the company? Are there any potential risks in this action? 2.Conch Republic Electronics is a mid sized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company original repaired radios and other household appliance when it was founded over 70 years ago. Over the years, the company has expanded, and it is now a reputable manufacturer of various specialty electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company in the finance department. One of the major revenue- producing items manufactured by Conch Republic is a personal Digital Assistant (PDA). Conch Republic currently has one PDA model on the market and slaes have been excellent. The PDA is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffet music. However, as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new PDA that has all the features of the existing one, but adds new features such as cell phone capability, The company has spent a further $200,000, for marketing study to determine the expected sales figures for the new PDA. Conch Republic can manufacture the new PDA for $215 each in variable costs. Fixed costs for the operation are estimated to run $4.3 million per year. The estimated sales volume is 65,000, 82,000,108,000,94,000 and 57,000 per year for the next five years, respectively. The unit price of the new PDA will be $500. The necessary equipment can be purchased for $32.5million and will be depreciated on a seven- year MACRS schedule. it is believed the value of the equipment in five years will be $3.5 million. Net working capital for the PDAs will be 20 percent of sales and will occur with the timing of the cash flows for the year (i.e, there is no initial outlay for NWC). Changes in NWC will thus first occur in year 1 with the first year's sales. Conch republic has a 35 percent corporate tax rate and a 12 pecent required return. Shelly has asked Jay to prepare a report that answers the following questions: A.what is the payback period of the project B.What is the profitability index of the project C.What is the IRR of the project D.What is the NPV of the project E.How sensitive is the NPV to change in the price of the new PDA F.How sensitive is the NPV to change in the quantity sold G.Should Conch Republic peoduce the new PDA H. Suppose Conch Republic loses sales on other models because of the introduction of the new models. How would this affect your analysis.,i want question 1&2 to be on a different file attachment. Thanks
Question 5
"Review the Scenario and the addenda items detailed below. Each of these items presents risks to the project. ? The network infrastructure is problematic in certain areas of the state, meaning that the existing infrastructure may not support the deployment of the e-mail system in all necessary areas. ? Several of the vendors have offered to develop specialized e-mail address books and templates for the state users, if their product is selected. ? In the resource planning stage of the effort, you've identified that the project lacks two network engineers and a business analyst who would be responsible for project documentation. ? The existing budget plan does not cover the anticipated 20% increase in licensing for one of the key candidate products under consideration (Globalcom). ? All the products under consideration for purchase offer more substantial discounts for more users. The statewide Ohio Department of Taxation is considering adopting one of these e-mail systems, as well. Determine if each of these five items present a negative risk or positive opportunity to the project. Next, identify a strategy for managing the risk and defend your choice. In your explanation, postulate the risk probability as high, medium, or low and assess the impact as low, moderate, or severe. Here are the risk management strategy options: ? avoid, transfer, mitigate (negative risk strategies) ? exploit, share, enhance (positive opportunities) ? accept or plan contingency (both negative risk and positive opportunities) Unit 4 - Assignment 1 Assignment Type: Individual Project Deliverable Length: 3-5 pages Points Possible: 125 Due Date: 8/11/2007 11:59:59 PM Review the Scenario and the addenda items detailed below. Each of these items presents risks to the project. The network infrastructure is problematic in certain areas of the state, meaning that the existing infrastructure may not support the deployment of the e-mail system in all necessary areas. Several of the vendors have offered to develop specialized e-mail address books and templates for the state users, if their product is selected. In the resource planning stage of the effort, you've identified that the project lacks two network engineers and a business analyst who would be responsible for project documentation. The existing budget plan does not cover the anticipated 20% increase in licensing for one of the key candidate products under consideration (Globalcom). All the products under consideration for purchase offer more substantial discounts for more users. The statewide Ohio Department of Taxation is considering adopting one of these e-mail systems, as well. Determine if each of these five items present a negative risk or positive opportunity to the project. Next, identify a strategy for managing the risk and defend your choice. In your explanation, postulate the risk probability as high, medium, or low and assess the impact as low, moderate, or severe. Here are the risk management strategy options: avoid, transfer, mitigate (negative risk strategies) exploit, share, enhance (positive opportunities) accept or plan contingency (both negative risk and positive opportunities) Finally, using Web Resources or other links, identify software, project management tools, or diagramming techniques that can be used by the project team to help manage risk. One method of research is to enter the term "risk analysis software" or "risk analysis tools" into HYPERLINK "http://www.google.com" t "_blank" www.google.com and access the links that apply. For software applications, the most appropriate tools are the ones that interface with Microsoft Project, include Pert diagramming techniques, and/or provide a cost-benefit and analysis feature as well. Please submit your assignment."
