1. Fraud, Professional Ethics and Auditor Independence 

   a) When assessing a client’s integrity, the auditor will consider the client’s willingness to allow the auditor full access to information required to form an opinion and pay a fair amount for the work completed. Explain why.

   b) Mike is a very experienced auditor with unique expertise in the mining industry. As a result, Mike has been the lead audit partner for the audit at BKK Oil for the last seven years. Recently, Mike was approached by the board of BKK with an offer of employment as a director starting in two years’ time. The only condition was that the audit work (for the year ended 30 June 2020) must be finished in six weeks and the independent auditor’s report signed off before 15th August 2020, as the Annual General Meeting (AGM) has been scheduled for early September. Mike is aware that the audit of BKK normally takes at least nine weeks.

   i) Identify and explain TWO possible threats to audit independence.

   ii) Suggest appropriate actions and safeguards that could be put in place to reduce the threat to an acceptable level.

   c) Two months before the end of the financial year, Greenlight Resort terminated the contract of one of its senior sales managers. Her employment was terminated after it was discovered she had worked in collusion with several customers to commit fraud. This included giving special discounts on room rates and event services, and reducing customers’ period of stay and value of other services provided. The manager would then take direct payments from the customers. During the investigation process, it was discovered that the manager was the only one allowed to access the customer database and had authorisation to update prices. For more than two years, the manager had never taken any annual leave.

   i) Identify and explain TWO fraud risk factors.

   ii) Identify TWO key accounts that are potentially affected by the fraud. For each account, identify ONE key assertion that is at risk.

i) Authorisation by the shift supervisor of all overtime hours worked.

ii) Review of overtime payment records by the project manager.

Briefly explain the purpose of each of the above control procedures, and identify whether the procedure recommended is a ‘prevent’ or ‘detect’ control.

c) You are reviewing the test result in relation to accounts receivable at Ryan’s Tools as below:

i) Is the above test a test of controls or a substantive test of details? Explain your answer. What type of procedure did the auditor use?

ii) Determine the key assertion addressed by the test procedure. Suggest ONE alternative testing procedure that can be used to test the assertion identified.

iii) Explain why the conclusion reached is appropriate or inappropriate, and outline the key additional audit procedure that you believe needs to be performed.

Kushlani Plc is considering changing its capital structure. Currently Kushlani has Rs. 10 million in debt at 8% and its stock price is Rs. 40 per share with 1 million shares outstanding. Kushlani is a zero growth firm and pays out all of its earnings as dividends. EBIT is Rs. 14.933 million and tax rate is 35%. Market risk premium is 4% and risk free rate is 6%. Kushlani is considering increasing its debt in capital structure to 30%, 40% or 50% at the interest rate of 8.25%, 8.5% and 9% respectively. Unlevered beta of Kushlani is 1.2.

1. What are Kushlani’s new beta, cost of equity and WACC if it has 30%, 40% and 50% debt? Determine the optimal capital structure of the Kushlani?

2. Using a graph show the Cost of Equity of Kushlani at different level of debt and highlight the premium for business risk and financial risk?   

(Please provide detailed answer)

You are Chief Financial Officer of the ABC Corporation. ABC has two divisions, one of which distributes alcohol, while the other manufactures bottles for brewers and beverage companies. The company is considering a capacity expansion project in the alcohol distribution division, and the Board of Directors has asked you to provide a financial analysis of the project.

• The project would require an initial investment of $100 million for a new distribution center. In addition, $20 million in additional working capital would need to be committed to the project. The working capital will be recovered at the end of the project life.

• The distribution center facilities would be depreciated on a straight-line basis over five years. At the end of five years, you estimate that the center will be sold for $20 million.

• The distribution center is expected to generate cash revenues of $85 million per year and cash operating costs of $50 million per year in each of the next five years.

• The corporate tax rate is 40%.

• The book value of ABC’s assets is $20 billion, while the book value of its outstanding debt is

  $5 billion. ABC’s equity has an estimated beta of 1.2.

• The expected return on the market portfolio is 15%, while the risk-free rate of return is 5%.

• ABC could issue new debt at a yield to maturity of 8%.

• Companies that operate purely in the bottle manufacturing industry have an average beta of 1.5 and an average debt-equity ratio (measured at market value) of one quarter.

• Companies that operate purely in the alcohol distribution industry have an average beta of 0.5 and an average debt-equity ratio (measured at market value) of two-thirds.

  Based on information above, you are to complete the project analysis to present the Board meeting that is scheduled tomorrow.

1. a) Calculate the weighted average cost of capital.

2. b) Calculate the free cash flow of each year for the expansion project.

3. c) What is the NPV for the project?

What is the significance of the slope. Use a significance level of 0.05

What is the coefficient of determination

Create a CodeBlocks project with a main.cpp file. Submit the main.cpp file in Canvas. C++ Language

A Game store sells many types of gaming consoles. The console brands are Xbox, Nintendo, PlayStation.

A console can have either 16 or 8 gigabytes of memory.

Use can choose the shipping method as either Regular (Cost it $5) or Expedite (Cost is $10)

The price list is given as follows:

Memory size/Brand Xbox Nintendo PlayStation

16 gigabytes 499.99 469.99 409.99

8 gigabytes 419.99 379.99 339.99

Determine the price of a given console dependent on the user inputs. The sales tax is 9.75% for each console.

Validation:

For the brand name, use input can be X for Xbox, N for Nintendo or P for PlayStation in upper letter case only.

For memory size user input can only be 8 or 16.

The input quantity should be 0 or positive, but must not exceed 20.

The shipping method can only be R or E.

If any user input is not correct, display an error message and skip all calculation.

Print the brand name and the quantity in the price calculation, for example with 16 gigabytes:

The item price for (2 x Xbox) is $999.98

All currency amounts should be displayed with 2 digits in decimal fraction.

There is No need to use a loop for repetition.

Here are several separate program sample runs.

Welcome to the Game store.

Enter the brand name of the game console (X for Xbox, N for Nintendo, P for PlayStation): X

Enter the memory size of the game console (8 or 16 gigabytes): 16

Enter quantity to buy: 2

The item price for (2 x Xbox) is $999.98

The sale tax is $ 97.50

Enter shipping method (R for Regular, E for Expedite): R

Shipping cost is $5.00

The total bill is $1102.48

----------------------

LIFO Perpetual Inventory

The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

3. Determine the ending inventory cost on June 30.
$

The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a three-month period ending June 30 are as follows:

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

3. Determine the ending inventory cost on June 30.
$

Use R to load in the file “data.csv”. Assume that this is a random sample from some population with mean µ and variance σ 2 .

(a) Plot a histogram of the data.

(b) Compute a 95% confidence interval for the population mean µ using the formula

X ± (S/√ n)tn−1,.975.

(Hint: tn−1,.975 can be computed with qt(.975,df=n-1))

(c) Compute a p-value for the hypothesis H0 : µ = 5 versus HA : µ > 5, based on the test statistic T = X−5 S/√ n .

(Hint: The p-value can be computed using 1-pt(T,df=n-1))

(d) Based on the p-value, do we reject the null hypothesis at α = .01?

(e) What is the smallest significance level α for which we would reject the null?

Data set:

Using the accompanying Student Grades​ data, construct a scatter chart for midterm versus final exam grades and add a linear trendline. What is the​ model? If a student scores 70 on the​ midterm, what would you predict her grade on the final exam to​ be?