Provide a numerical example of special order decisions and make or buy decisions and explain how these decisions are backed by quantitative and qualitative considerations.

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Accounting Question

Q1. Differentiate with suitable examples the traditional costing systems and activity-based costing. Explain how ABC is used inmanufacturing by providing a numerical example.

Q3. Provide a numerical example of special order decisions and make or buy decisions and explain how these decisions are backed by quantitative and qualitative considerations.

 

Why do companies use the allowance method to account for bad debts? Describe the diverse methods used to estimate bad debts in an accounting system. Provide examples for each method.

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Assignment Question(s): Marks15)

Q1. Suppose you are an auditor who has been tasked with looking into the internal controls at a company. How can you evaluate the company’s internal controls to see if they are sufficient? (5Marks)

Q2. Why do companies use the allowance method to account for bad debts? Describe the diverse methods used to estimate bad debts in an accounting system. Provide examples for each method.   (5Marks)

Q3. Consider that you own a business that purchases equipment for 50,000SR. How would you calculate this asset’s depreciation? Use the different methods to depreciate the equipment.

Note: To calculate depreciation, you must provide the salvage value, useful life, and annual units produced.   (5Marks)

 

 

Briefly explain Revised question. What is 1 advantage and 1 disadvantage of the matching principle?

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Revised question

Write 150-200 words per question answering the following.

1) Briefly explain Revised question.

2) What is 1 advantage and 1 disadvantage of the matching principle?

Should this CPA’s professional license be sus- pended or revoked? Assume that he is convicted or pleads guilty to these crimes . Would your answer be different ?

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Accounting question

Answer the following questions using your own words…

  1. According to police reports, a Gainesville, Florida, CPA was arrested for engaging in sexual assault. This story generated substantial publicity , especially in northern Florida . Despite the heinous nature of these crimes, there is no evidence whatsoever that the tax accounting services performed by him or staff members at his tax preparation service are sub- standard .
  2. Should this CPA’s professional license be sus- pended or revoked?
  3. Assume that he is convicted or pleads guilty to these crimes . Would your answer be different ?
  4. In a landmark U.S. Supreme Court case, Price Waterhouse, CPAs v. Hopkins, a senior accountant was denied a promotion to partner at a major CPA firm because, according to one evaluation, she needed to “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” Others expressed more general criticisms that she was rude, impatient, and excessively demanding. When Ms. Hopkins sued under Title VII of the Civil Rights Act of 1964, the CPA firm defended its actions, claiming that Ms. Hopkins’ overly aggressive personality gave it sufficient grounds for denying her a promotion. Did the CPA firm commit sex discrimination?
  5. A staff accountant with a large corporation wrote a book in which he proudly admits that, as tax deadlines approached, he “popped illegal amphetamines” and “frankly was stoned” when he was preparing the company’s tax returns. He claims that his use of unprescribed drugs enhanced his ability to get his tasks completed. Were this accountant’s actions discreditable under the Code of Conduct? Were his statements discreditable?
  6. An unmarried, gay couple recently attempted to rent an apartment from a landlord who happens to be a CPA. The CPA told them that they would make “wonderful tenants,” but she could not rent to them because of her “deep religious convictions.” The prospective tenants sued the CPA, and the court held that the CPA violated applicable anti-discrimination laws. Did the CPA violate the Code of Conduct?
  7. A partner at a major CPA firm once confided that “it’s simple…we like to hire pretty women. Our clients generally are middle-aged men and they enjoy being around pretty women.”
  8. Did this partner admit to a discreditable act?
  9. Would your answer be the same if the partner simply had said that they like to hire “good looking people because when “our people look good, we look good?”
  10. If you are a member of the AICPA, do you have a duty to report this act to appropriate AICPA officials?

 

At what two levels does the auditor assess the risk of material misstatement? Describe the types of procedures that constitute risk assessment procedures.

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RISK ASSESSMENT PROCEDURES

  1. At what two levels does the auditor assess the risk of material misstatement?
  2. Describe the types of procedures that constitute risk assessment procedures.

 

Define what is meant by a management assertion about financial statements. Describe how PCAOB assertions and assertions in international and AICPA auditing standards are similar and different.

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Accounting question

  1. Describe what is meant by the cycle approach to auditing. What are the advantages of dividing the audit into different cycles?
  2. Define what is meant by a management assertion about financial statements. Describe how PCAOB assertions and assertions in international and AICPA auditing standards are similar and different.

 

Explain the objective of conducting an audit of financial statements and an audit of internal controls. Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements.

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AUDIT RESPONSIBILITIES AND OBJECTIVES

Explain the objective of conducting an audit of financial statements and an audit of internal controls.

Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements.

Explain the auditor’s responsibility for discovering material misstatements due to fraud or error.

Describe the need to maintain professional skepticism when conducting an audit.

Describe the key elements of an effective professional judgment process.

Identify the benefits of a cycle approach to segmenting the audit.

Describe why the auditor obtains assurance by auditing transactions and ending balances, including presentation and disclosure.

Distinguish among the management assertions about financial information.

Link transaction-related audit objectives to management assertions for classes of transactions.

Link balance-related audit objectives to management assertions.

Explain the relationship between audit objectives and the accumulation of audit evidence.

 

What are the four major sources of auditors’ legal liability? Compare and contrast traditional auditors’ legal responsibilities to clients and third-party users under common law. How has that law changed in recent years?

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CIVIL LIABILITY UNDER THE FEDERAL SECURITIES LAWS

  1. What are the four major sources of auditors’ legal liability?
  2. Compare and contrast traditional auditors’ legal responsibilities to clients and third-party users under common law. How has that law changed in recent years?
  3. What are the auditor’s possible defenses against lawsuits filed under the Securities Exchange Act of 1934?

 

Identify the circumstances under which a CPA can disclose confidential information without client permission. Explain the rule on contingent fees. Why is this rule necessary?

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Accounting Question

  1. Identify the circumstances under which a CPA can disclose confidential information without client permission.
  2. Explain the rule on contingent fees. Why is this rule necessary?

 

Analyze potential multicollinearity issues of the X variables (all variables except for trips). Use threshold=10. What variables are eliminated?

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DISCUSSION QUESTION

Boating trips.csv contains a dataset describing the number of boating trips of leisure boat owners. It contains the following variables:

Trips: number of boating trips in the survey year

Quality: respondent’s rating of the facility’s quality

Ski: whether the respondent engages in water-ski activities

Income: household income in $1000.

Userfee: has the respondent paid annual user fee to the destination

CostC: average expenditure ($) during a boat trip at lake C

CostS: average expenditure ($) during a boat trip at lake S

CostH: average expenditure ($) during a boat trip at lake H

 

(a) Plot histogram of the outcome variable (trips). Copy it here.

(b) Analyze potential multicollinearity issues of the X variables (all variables except for trips). Use threshold=10. What variables are eliminated?

(c) Run a poisson regression of the outcome variable (trips) on the remaining variables from (b). Which variable are significant predictors of trips at 0.05 level?

(d) How does the expected number of boating trips differ for owners who have paid annual user fees vs. those who haven’t?

(e) Run a negative binomial regression of the outcome variable (trips) on the same set of variables as in (c). Now what is the your answer to (d)?

(f) Which model provides better model fit? Poisson or negative binomial? Support your answer.

 

Part 2. Admdata.csv

Admdata.csv contains a dataset on admission outcomes of graduate school applicants. There are 4 variables in this dataset.

Admit: =yes if the applicant is admitted

Gre: GRE score of the applicant

Gpa: GPA of the applicant

Rank: rank of the undergraduate institution of the applicant (Tier 1 is the highest and Tier 4 is the lowest).

(a) Tabulate the variable admit. What is the average probability of an applicant being admitted to a graduate program in this dataset?

(b) Run a logistic regression of the outcome variable (admit) on the other variables (gre, gpa, rank). Copy your results.

(c) Based on the estimation results, compare the odds of admission for applicants graduating from each tier of undergraduate institutions. (Hint: use Tier 1 as the base, explain whether the odds for Tier 2/3/4 is higher or lower, and by how much, respectively.)

(d) Based on the model, what is the predicted admission probability for an applicant with GRE 720, GPA=3.85, who graduated from a Tier2 undergrad institution?

(e) Predict probabilities of admission for all applicants in the dataset. Use 0.5 as the cutoff to make predictions of admission status (yes vs. no). Copy the confusion matrix here. What is the accuracy of the model, and what are sensitivity and specificity of the model. What do you think about the model predictions? Are you satisfied or concerned, and why?

(f) Suppose you want to improve the sensitivity of the model, how would you adjust the cutoff, and why?