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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
(a) You are preparing for a job interview as a risk manager. This requires you to make a ten-minute presentation on the functions and determinants of the efficiency of a risk manager.
Required:
Present an outline of your 10-minute presentation. (10 Marks)
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
(b) The public sector is the driver of the economies of many developing nations. Public Finance Management has become a focus of attention in these economies. Development partners have therefore drawn the attention of governments to the Nolan Committee’s report on Standards in Public Life.
Required:
Discuss SIX of these principles for public office holders and show how they can enhance performance in the public sector. (6 Marks)
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Adeco Nigeria plc. is a large and diversified company with several factories. One of its factories that produces “Apet” has not been able to meet its sales target for over two years. The board has mandated the company’s management to take an urgent decision on what to do with the factory.
The management has therefore set up a committee of three, the factory manager, the marketing manager, and the management accountant to analyze the situation and come up with a report on what they felt the management should do. The marketing manager has submitted two proposals to the committee. These are:
The management accountant is to work on these proposals with the information provided by the factory manager and show with calculations that will help the committee determine which proposal to be recommended to management. The management accountant is also to provide a third option, the closure of the factory.
The factory manager has submitted the following information to the management accountant:
The following additional information has also been made available:
(i) There are 50,000 kg of material A in inventory. This originally cost N1.5 per
kg. Material A has no other use and unless it is used by the division, it will
have to be disposed of at a cost of N750 for every 5,000 kg.
(ii) There are 30,000 litres of material B in inventory. Any unused material can be
used by another department to substitute for an equivalent amount of a
material, which currently costs N1.875 per litre. The original cost of material B
was N0.75 per litre and it can be replaced at a cost of N2.25 per litre.
(iii) All production labour hours are paid on an hourly basis. Rumours of the
closure of the department have led to a large proportion of the department‟s
employees leaving the organisation. Uncertainty over its closure has also
resulted in management not replacing these employees. The department is
therefore, short of labour hours and has sufficient to produce only 25,000
units. Output in excess of 25,000 units would require the department to hire
contract labour at a cost of N5.625 per hour. If the department is shut down
the present labour force will be redeployed within the organisation.
(iv) Included in the variable overhead is the depreciation of the only machine
used in the department. The original cost of the machine was N300,000 and it
is estimated to have a life of 10 years. Depreciation is calculated on a straightline basis. The machine has a current resale value of N37,500. If the
machinery is used for production, it is estimated that the resale value of the
machinery will fall at the rate of N150 per 1,000 units produced. All other
costs included in variable overhead vary with the number of units produced.
(v) Included in the fixed production overhead is the salary of the factory manager
which amounts to N30,000. If the department were to shut down the manager
would be made redundant with a redundancy pay of N37,500. All other costs
included in the fixed production overhead are general factory overheads and
will not be affected by any decision concerning the factory.
(vi) The non-production cost charged to the factory is an apportionment of the
total non-production costs incurred by the factory.
The committee will be meeting in a week‟s time to prepare its report to
management on the line of action management should follow, either one of the
marketing manager‟s proposals or to close down the factory.
63
Required:
As the management accountant of Adeco plc., you are to:
a. Prepare detailed calculations to support the committee‟s recommendation to
the management whether to:
i. reduce production to 25,000 units
ii. reduce production to 35,000 units
iii. shut down the factory. (20 Marks)
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A whistleblower reported to a regulator a misstatement in the financial statements of Koko Limited on overstated expenses and overvaluation of inventory.
An informed shareholder at the Annual General Meeting, while commenting on the company’s financial statements, stated that the company directors should always act in the public interest.
Required:
Explain:
a. “Acting in the public interest” (6 Marks)
b. Professional scepticism (4 Marks)
c. The fundamental principles a professional accountant should comply with (10 Marks)
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Your firm has just recruited some audit trainees. It is the practice of the firm to give orientation to the newly recruited so that they could be familiar with the firm’s operations, especially before the commencement of an audit busy season.
As an audit senior in the firm, you have been directed to facilitate the programme for the newly hired trainees. You were allocated a topic on the archiving and retrieval of audit documents for a current year audit.
Required:
Based on your experience over the years, discuss:
a. Audit working paper archiving (1 Mark)
b. The purposes of audit working papers archiving (6 Marks)
c. The types, contents, and importance of audit working paper files (8 Marks)
d. The owner of audit working paper files and the conditions under which access to them could be granted to a third party (5 Marks)
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During the review of the internal control activities of VIDA Plc., the Chairman of the Audit Committee stated in his concluding remarks that in any organization, we may conclude that an entity has an effective control environment if management is committed to accurate financial reporting with the support of an effective internal control system.
The control process assists the organization to embark on proper data analysis and information management that will enable the business and its employees to function effectively. Control focuses on activities before, during, and after daily operations to ensure safeguards and management of assets to enable the organization to achieve its aims and objectives. An effective and efficient system of internal control will give great returns to shareholders and ensure transparent financial reporting.
Required:
Justify the above statement by identifying and explaining:
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A financial analyst in his contribution at a seminar stated that audited financial statements show the records of stewardship of a company’s activities and the financial position of a company at the end of a period.
The financial report has input from key stakeholders who must perform their duties well and in an objective manner. In view of this, the report should give confidence to the users of the financial statements and support good corporate governance.
The financial report is used for decision making and is prepared based on management estimates, judgement, assumptions, and reliable evidence.
As a chartered accountant, you have been invited to make a contribution at the seminar in support of the statement of the analyst:
You are required to discuss:
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The Financial Reporting Council of Kalagi, when performing a review of the financial statements of Yakoyo Plc., detected some errors and disclosure deficiencies which were brought to the attention of the management of the company. The management put the blame on the company’s auditors and accused them of negligence.
You are a chartered accountant and an informed shareholder of the company. You are required to explain:
a. “Expectation gap” in audit (5 Marks)
b. How the expectation gap can be bridged (7½ Marks)
c. Why an auditor may not detect fraud (7½ Marks)
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On September 20, 2019, Phonetell Nigeria Limited sold 100 units of Android PT-Tablet to a major customer for N200,000 each. The PT-Tablet costs Phonetell Nigeria Limited N160,000 each.
The terms of sales are that the customers have the right to return the tablets for a full refund within 3 months. On expiration of the 3 months period, the customer can no longer return the PT-Tablet, and payment becomes immediately due. Phonetell has entered into transactions of this type with these customers previously and can reliably estimate that 4% of the Android PT-Tablets are likely to be returned within the three-month period.
Required:
Explain how the above transactions would be reported in the financial statements of Phonetell Nigeria Limited for the year ended September 30, 2019.
(4 Marks)
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Phonetell Nigeria Limited is a network service provider registered with the Nigeria Stock Exchange (NSE). The company has been operating in the country for the past 10 years.
On September 1, 2019, the company entered into a service contract with its customers to provide a special model handset and one year of service at a price of N250,000.
If the customers acquired the handset only, it would be sold at a price of N75,000, and if the network service is separately provided for one year duration, the customer will be made to pay the sum of N200,000 for the one-year duration.
The financial year-end of Phonetell Nigeria Limited is September 30.
Required:
Calculate the revenue from this contract for the accounting years ended 2019 and 2020 in accordance with the provisions of IFRS 15.
(10 Marks)
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IFRS 15 on revenue from contracts with customers was issued for the purpose of ensuring that revenue is properly accounted for, better than what we have under IAS 18 and IAS 11.
Required:
i. Identify the FIVE-step model that needs to be followed by entities when recognizing revenue from contracts under IFRS 15.
ii. Explain how IFRS 15 is expected to improve the financial reporting of revenue.
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