Freehold Ltd is a manufacturing firm which has been operating in Australia for the past ten years. As a part of the firm's strategic plan for expansion, the management of the firm has decided to embark upon a leverage buyout of a medium-sized Vietnamese firm to increase its global presence. Freehold Ltd. is currently seeking debt financing from ABC Ltd. for its expansion programmed. During a recent financial meeting between the Chief Executive Officer, David Livingston, and Chief Financial Officer, Derrick Rodman, David and Derrick agreed to delay its research and development expenditure as a means for ensuring that its financial statements are consistent with the stipulations of ABC Ltd. to secure the required funding for the leverage buyout. Additionally, an invoice for a material expense item has been intentionally excluded in the preparation of the financial statements for ABC Ltd.

 As Freehold Ltd is seeking to expand its operations, it has to grapple with the current high turnover rate of its accounting staff. The accounting department is severely understaffed which has resulted in staff burn out with an adverse impact on the firm's reporting process. In view of this, Mr. Livingston has been called for an executive meeting with senior management to discuss the issue and solicit for ideas that could help address the accounting staff shortage since Covid-19. Premised on the scenario presented above for Freehold Ltd, provide appropriate responses to the following questions: 

1. Evaluate the decision made by David and Derrick during the recent financial meeting and indicate which fundamental code of conduct for professional accountants may have been breached by them. 

2. Discuss how the actions of Freehold Ltd affect the quality of its financial reporting process and impact the firm's compliance with the Australian accounting standards. 

3. Discuss at least two specific emerging technologies that Freehold Ltd could leverage on address the current shortage in accounting staff. 

4. Discuss at least three ways in which Freehold Ltd could benefit from the use of the emerging technologies mentioned in question 3 above.

Answer rating: 100% (QA)

1 The decision made by David and Derrick to delay research and development expenditure and exclude an invoice for a material expense item from the financial statements in order to secure funding for t... View the full answer