Compare the rights of plaintiffs under common law with the rights of persons who purchase securities registered under the Securities Act of 1933 and sustain losses. In your answer, emphasize the issue of who must bear the burden of proof. Remember to complete all parts of the problems. Do not forget to show the necessary steps and explain how you attained that outcome.
Harris Fell, CPA and member of the AICPA, was engaged to audit the financial statements of Wilson Corporation. Fell had half-completed the audit when he had a dispute with the management of Wilson Corporation and was discharged. Hal Compton, CPA, was promptly engaged to replace Fell. Wilson Corporation did not compensate Fell for his work to date; therefore, Fell refused to allow Wilson Corporation’s management to examine his working papers. Some of the working papers consisted of adjusting journal entries and supporting analysis. Wilson Corporation’s management had no other source for this information. Did Fell violate the AICPA Code of Professional Conduct? Explain fully. Remember to complete all parts of the problems. Do not forget to show the necessary steps and explain how you attained that outcome.
Colorado Springs Company (CSC) is a wholesaler with fiscal year ended December 31 of previous year. Since it is publicly-traded, it undergoes external audit. The most recent audit was completed in February of this year. As part of the audit of the financial statements, the auditors tested the effectiveness of management’s assessment of internal control over financial reporting. The auditor found out that existing internal controls were inadequate. Specifically, CSC’s accounting system for sales, cash receipts, accounts receivables, and accounts payable had material weakness. The audit revealed that there were:
- Poor accounting system of recording keeping
- Late deposits of cash receipts
- Excessive aged and high accounts receivable balances
- Disregard for early payments for discounts on invoices
- Late payments of accounts payable (sometimes due to lack of cash)
- Lax appropriate segregation of duties
- Relaxed ru
Answer each of the questions below with a minimum of 125 words each.
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QUESTION 1: Although ROI can be a good measure of a company's performance, there can be some drawbacks to using this measure to base management's performance. Some argue that having a performance measure like ROI will cause managers to look more to the short term rather than to focus on solid long-term planning.
This scenario was one that I witnessed at my position with the airplane parts manufacturer. In that company, managers changed from one role to another around every 18 months. Because of this, many managers only focused on what they had to do to meet their metrics for the next year or so. Upper management ended up extending the time for managers to be in a role to at least two years. This did help to get managers focused more on the longer term.
Class, what are some other criticisms of using ROI? Do you agree or disagree?
Answer each of the questions below with a minimum of 125 words each.
o
QUESTION 1: Although ROI can be a good measure of a company's performance, there can be some drawbacks to using this measure to base management's performance. Some argue that having a performance measure like ROI will cause managers to look more to the short term rather than to focus on solid long-term planning.
This scenario was one that I witnessed at my position with the airplane parts manufacturer. In that company, managers changed from one role to another around every 18 months. Because of this, many managers only focused on what they had to do to meet their metrics for the next year or so. Upper management ended up extending the time for managers to be in a role to at least two years. This did help to get managers focused more on the longer term.
Class, what are some other criticisms of using ROI? Do you agree or disagree?
