ACCOUNTING CHANGES AND ERROR ANALYSIS TRUE-FALSeConceptual Answer No. Description F 1. Change in accounting estimate. T 2. Errors in financial statements. F 3. Adoption of a new principle. T 4. Retrospective application of accounting principle. F 5. Reporting cumulative effect of change in principle. T 6. Disclosure requirements for a change in principle. T 7. Indirect effect of an accounting change. T 8. Retrospective application impracticality. F 9. Reporting changes in accounting estimates
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transgressions. This Houston-based public waste management company then faces a historic restatement of earnings from 1992 to 1997 and this led to further investigation of accounting fraud. At this time‚ this was the largest corporate restatement in history and one of the most conspicuous executive accounting scandals seen by the Securities Exchange Commission (SEC). Management had deliberately inflated earnings to meet target margins and deferred current period expenses such as depreciation expense
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Waste Management Inc. Fraud I. BRIEF HISTORY Waste Management Inc is a company in North America that provides waste and environmental services. This company was founded by Larry Beck in 1894. The company ’s operations also involved managing air and gas‚ environmental and groundwater protection as well as environmental engineering. By 1971‚ the company became more public after the 133 acquisitions and the $82M in revenue that were made and soon became the largest waste hauler in the
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A COMPARATIVE ANALYSIS OF CORPORATE REPORTING IN NIGERIA AND IN THE UNITED KINGDOM Abstract; This paper presents a comparative analysis of corporate reporting in Nigeria vis-à-vis UK. It describes the key factors in the business environment which influenced accounting system development as well as the regulatory frameworks. It tabulates and compares significant accounting rules and methods prescribed by both UK and Nigerian GAAPs‚ using the Financials of Dangote Cement Plc‚ a hugely market capitalized
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8: Reformulated CSE Statement CSE0 +Net transactions with s/holders +Share issues - Share buy backs - Dividends +Comprehensive Income +NI reported +/- securities avail. For sale +/- currency translations +/- hedging +/- prior earnings restatements CSE1 Table 8.1 of Dirty Surplus Items: OI Items Changes in accting for contingencies Additional minimum pension liability Tax benefits of loss carry-forwards acquires Tax benefits of dividends paid to ESOPs Unrealized gains and losses
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scheme involving its accounting records. Executives were accused of inflating earnings by as much as $1.7 billion. The scheme was designed to scam the shareholders while the executives took all the profits for themselves. And for more than five years‚ during 1992 to 1997‚ it worked. The fraud at Waste Management started out with six executives manipulating the company’s financial results to meet predetermined earning targets. According to the SEC report the company’s predetermined profits and revenues
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CHAPTER 22 CHAPTER 22 ACCOUNTING CHANGES AND ERROR ANALYSIS TRUE-FALSE—Conceptual Answer F T F T F T T T F T F F T F T T F F T T No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Description Change in accounting estimate. Errors in financial statements. Adoption of a new principle. Retrospective application of accounting principle. Reporting cumulative effect of change in principle. Disclosure requirements for a change in principle. Indirect effect of an
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Analysis of case 1.4 Sunbeam: The Revenue Recognition Principle 1. Company history ← In April 1996‚ Sunbeam appointed Albert Dunlap as its CEO and chairman. ← Immediately‚ the CEO began replacing nearly all of the upper management team and led the company into aggressive corporate restructuring. ← As at end of March 1997‚ the company arranged special sales contract with the wholesaler provided that the wholesaler could return all of the merchandise‚ with Sunbeam
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Chapter 06 Analyzing Operating Activities Multiple Choice Questions 1. Which of the following is not a reason for economic income and accounting income to differ? A. Transaction basis B. The monetary assumption C. Conservatism D. Earnings management 2. As a general rule‚ revenue is normally recognized when it is: A. measurable and earned. B. measurable and received. C. realizable and earned. D. realizable. 3. Which of the following measures of accounting income is typically reported
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Framework for financial reporting: trying to make a new standard (or framework) for the reporting of assets and liabilities‚ changing from historical cost to a fair market value. However‚ hard to agree on what fair value is. Can be exit price (how much you would sell the asset/settle the liability) or entry value (cost of replacing). ! ! Good judgments: We are unconsciously biased which can hurt auditing. Affected by first impression‚ taking the easy route‚ believing what we are told and
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