As the chief financial officer of Fones for U Ltd, you discover a significant misstatement that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
As the chief financial officer of Fones for U Ltd, you discover a significant misstatement that overstated assets in this year's financial statements. The misleading financial statements are contained in the company's annual report, which is about to be issued to banks and other creditors. After much thought about the consequences of telling the managing director, Jo Aldridge, about this misstatement, you gather your courage to report this concern. But Jo says, 'What they don't know won't hurt them. But just so we set the record straight, we'll adjust next year's financial statements for this year's misstatement. We can fix it next year when we make more profit. Just don't make that kind of mistake again.' Required: Who are the stakeholders in this situation? (3 marks) What would be your course of action, as chief financial officer? (12 marks) As the chief financial officer of Fones for U Ltd, you discover a significant misstatement that overstated assets in this year's financial statements. The misleading financial statements are contained in the company's annual report, which is about to be issued to banks and other creditors. After much thought about the consequences of telling the managing director, Jo Aldridge, about this misstatement, you gather your courage to report this concern. But Jo says, 'What they don't know won't hurt them. But just so we set the record straight, we'll adjust next year's financial statements for this year's misstatement. We can fix it next year when we make more profit. Just don't make that kind of mistake again.' Required: Who are the stakeholders in this situation? (3 marks) What would be your course of action, as chief financial officer? (12 marks)
Expert Answer:
Answer rating: 100% (QA)
1 the stakeholders in this situation are the banks and other creditors who have pro... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date:
Students also viewed these finance questions
-
You are the chief financial officer of a local manufacturing company, Larsen Enterprises. This company is run by two brothers, Steve and John Larsen. The Larsen brothers have built this company up...
-
You are the chief financial officer of a large manufacturing company. As CFO, you are responsible for investing excess cash in marketable securities and then handling the accounting for those...
-
The Wall Street Journal reported interest rates of 6 percent, 6.35 percent, 6.65 percent, and 6.75 percent for three-year, four-year, five-year, and six-year Treasury notes, respectively. According...
-
Use a computer to find the following probabilities. a. P(2250 > 250) b. P(236 > 25) c. P(2600 > 500) d. P(2120 > 100)
-
What is a non-cash expense? What is a deferred charge? Describe their similarities and the differences between them.
-
Find the value at time 50 of the set of end-of-year cash flows shown, if the appropriate rate of return is 11 percent per year: a. $179,255 b. $1,255,000 c. $33,079,044 d. $6,106,191,094 Year(s) 1...
-
The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the...
-
Jose was asked to solve the following trigonometric equation for 0 < x < 2. sin(x) cos(2x) = 0 - Jose worked the problem the following way: Line 1: sin(x)-(1-2 sin (x)) = 0 Line 2: sin(x) - 1+2 sin...
-
Your company is competing for business in the toy robot industry Prepare a sales, production, direct materials, and direct labor budget based on the following assumptions Assumptions Q1 Q2 Q4 1....
-
Prepare the stockholders' equity section after the stock dividend is distributed. ( Assume no other changes to equity. )
-
When It Comes to Eating Away at Democracy, Trump Is a Winner Links to an external site. . Thomas B. Edsall. The New York Times. 8/24/22 (segments of article) 1) After reading the article, how would...
-
Concentration of Carbon Monoxide (CO) in the Air According to a joint study conducted by Oxnard's Environmental Management Department and a state government agency, the concentration of CO in the air...
-
-At 0 ing i A wave on a string is described by y (x, t) = (2.0 cm) x cos [2 (x/(2.4 m) + t/(0.30 s))], where x is in m and t is in s. Part D What is the wave length? Express your answer in meters. =...
-
Eli has demonstrated an impressive ability to adjust to her new surroundings and has shown increasing interest in her environment. Her interactions with his peers and educator, her eager...
-
A stock price at time t is $13.95 and at time t +1is $15.50. What is the simple return for this time period at time t +1?Write the return as a decimal, not a percentage and round to two decimal...
-
The following information is available to prepare a company's statement of cash flows for the year just ended: Loss on sale of equipment Purchase of equipment Proceeds from sale of equipment...
-
A bar of a steel alloy that exhibits the stress-strain behavior shown in Figure 6.22 is subjected to a tensile load; the specimen is 375 mm (14.8 in.) long and has a square cross section 5.5 mm (0.22...
-
How does the FASB define the probability term more likely than not in Statement No. 109 ?
-
On December 31, 2010, Magily Company acquired the following three intangible assets : (a) A trademark for $30,000. The trademark has seven years remaining in its legal life. It is anticipated that...
-
Mills Manufacturing is required to maintain a compensating balance of $15,000 with its bank to maintain a line of open credit. The compensating balance is legally restricted as to its use. How should...
-
In a computer system, how are accounting records posted? a. master file is updated to a transaction file b. master file is updated to an index file c. transaction file is updated to a master file d....
-
Sarbanes-Oxley legislation calls for sound internal control practices over financial reporting and requires SEC-registered corporations to maintain systems of internal control that meet SOX...
-
An electronic walkthrough of the application's internal logic is called a. a salami logic test. b. an integrated test. c. tracing. d. a logic bomb test.
Study smarter with the SolutionInn App