Grove Clark is a ten-partner accountancy firm. It has been approached by five potential audit clients and the partners are considering the independence and ethical risks associated with taking on these audits.

Client A is a company in the financial services industry. Grove Clark have no experience in this industry but they would like to build up some expertise in this industry. The chief financial officer of Client A used to be a Grove Clark partner.

Client B has been recommended to Grove Clark by Client H. Clients B and H are both in the manufacturing industry and have worked together on several large contracts. If Grove Clark accept Client B, Company H expect a discount on its next audit as commission for making the recommendation.

Client C is a new company with ambitious plans for growth and stock market listing. Whilst Client C is currently exempt from statutory audit, the directors wish an audit to be conducted to make it easier to negotiate lending arrangements with its bank. A meeting with the bank has been scheduled for three months after the year-end and the directors insist that the audited financial statements with an unmodified report be available before the meeting.

Client D is a start-up company owned and managed by a couple of scientist/inventors who have discovered a way of converting insects into food fit for human consumption. They need to be associated with a reputable accounting firm in order to approach large corporations for the finance needed to develop their scheme and as a result they are happy to pay a higher fee.

Client E is a medium-sized I.T. company which has developed a new app for downloading music from the internet. The CFO resents having to pay an audit fee and suggests instead that the audit fee could be taken either as new shares issued by Client E or by the firm agreeing to accept 5% of the profits generated by the new app.

Required

: a) For each potential client highlight any independence or ethics risks the partners should consider and why. In addition, suggest safeguards that could be considered to mitigate the relevant risks.

b) Explain what is meant by ‘professional scepticism’ and how it is relevant to the conduct of an audit of financial statements.

10- A patient's insistence on leaving against medical advice should be:
ignored to prevent a violent confrontation
noted by the patient
noted on the medical record
all are proper responses



13- To prove fraud, one must show:
untrue statement made with intent to deceive
justifiable reliance
damages
all of the above

14-The legal theories of product liability include:
negligence
breach of warranty
strict liability
all of the above


15-An intravenous solution contaminated by the negligence of the product user, rather than the manufacturer, is an example of a:
intervening cause
product liability defense
all of the above
none of the above

16-Virtue ethics addresses difficult issues such as the nature of life, the nature of death, what sort of life is worth living, what constitutes murder, how we should treat people who are especially vulnerable, and the responsibilities that we have to other human beings.

True
False

17-Professional ethics are standards or codes of conduct established by the membership of a specific profession.

True
False

18-Compassion is a form of beneficence. People, often believing they know what is best for another, often make decisions they believe are in that person’s best interest.

True
False

19-Negative tolerance implies one will reluctantly put up with another’s beliefs. In other words, they simply tolerate the view of others.

True
False

20-Crimes are established by legislative bodies.

True
False

21- Medicare is a federally sponsored health insurance program for persons over 65 years of age and certain disabled persons.
True
False

22- Failure to conform to or a departure from a required duty of care owed to a patient is considered a breach of duty.

True
False

23- The plaintiff must establish a negligent act was newsworthy.

True
False

24-Public figures have more difficulty in pursuing defamation litigation than the average individual.

True
False

25- Slander is the intentional touching of another’s person in a socially impermissible manner, without that person’s consent.

True
False

26- A tort committed deliberately and based on the premise the defendant intended the harmful consequences of his or her behavior is cohesion.

True
False

Grove Clark is a ten-partner accountancy firm. It has been approached by five potential audit clients and the partners are considering the independence and ethical risks associated with taking on these audits.

Client A is a company in the financial services industry. Grove Clark have no experience in this industry but they would like to build up some expertise in this industry. The chief financial officer of Client A used to be a Grove Clark partner.

Client B has been recommended to Grove Clark by Client H. Clients B and H are both in the manufacturing industry and have worked together on several large contracts. If Grove Clark accept Client B, Company H expect a discount on its next audit as commission for making the recommendation.

Client C is a new company with ambitious plans for growth and stock market listing. Whilst Client C is currently exempt from statutory audit, the directors wish an audit to be conducted to make it easier to negotiate lending arrangements with its bank. A meeting with the bank has been scheduled for three months after the year-end and the directors insist that the audited financial statements with an unmodified report be available before the meeting.

Client D is a start-up company owned and managed by a couple of scientist/inventors who have discovered a way of converting insects into food fit for human consumption. They need to be associated with a reputable accounting firm in order to approach large corporations for the finance needed to develop their scheme and as a result they are happy to pay a higher fee.

Client E is a medium-sized I.T. company which has developed a new app for down-loading music from the internet. The CFO resents having to pay an audit fee and suggests instead that the audit fee could be taken either as new shares issued by Client E or by the firm agreeing to accept 5% of the profits generated by the new app

For each potential client highlight any independence or ethics risks the partners should consider and why. In addition, suggest safeguards that could be considered to mitigate the relevant risks.

Explain what is meant by ‘professional scepticism’ and how it is relevant to the conduct of an audit of financial statements.

Scenario

The long-term care center has 225 beds and provides the highest level of patient care, according to on- going Department of Health Services annual surveys. The Director of the long-term center has the overall responsibility of ensuring the continuing high level of quality outcomes while also concurrently keeping the facility as risk free as practical. You and the Director have just returned from an annual Long-Term Care Association symposium where you were both introduced to some new groundbreaking initiatives regarding the differences between risk management and quality improvement.

Earlier in the week, the Director called for a meeting of the center’s department managers, including the Quality Assurance Nurse and the Manager of Risk Management. After briefing them on the symposium talking points, your Director asks you to come up with a working plan and strategy for how the facili-
ty will use both of the concepts you have introduced to arrive at a more centralized and standardized approach. Overall, the desired outcomes focus on adopting a new approach to higher quality with fewer risk factors for the organization.

Later that week, the Manager of Risk Management, the Manager of Nursing Quality Assurance, and a representative from Human Resources met to formulate a new plan to reduce the litigation exposure while concurrently increasing the quality of patient outcomes. They set about the complex set of tasks with the expectation that you, as the Director’s designated facilitator, will be closely reviewing their final recommendations.

Provide a 250-word executive summary of the research project and recommended plan of action that you will provide to the Director.

Address the following:

Questions: 63 words for each question

What is the necessary background information needed to complete your executive summary?Who

are the stakeholders?

How do the facility’s current Continuous Quality Improvement (CQI) outcomes correspond with the current litigation prevention systems?

What factors within the nursing units are the most critical to consider when examining higher quality outcomes?

What factors within the nursing units are the most critical to consider when examining lower litigation adverse actions and operational impact?

What future steps must be taken to accomplish this directive?

1. Suppose individuals A and B have the same money income and tastes and face the same set of prices of all goods except access to a free National Park. (They will be 2 points on the same demand curve; find the equation to the line and the X and Y intercepts.) Individual A lives farther away than individual B and has higher travel costs. Their annual use is summarized as:

How much consumer surplus does each individual receive per year from the park usage? What are the total social benefits (as measured by the sum of the consumer surplus measures) from the park?

2. A worker, who is typical in all respects, works for a wage of $50,000 per year in a perfectly safe occupation. Another typical worker does a job requiring exactly the same skills as the first worker, but in a risky occupation with a known death probability of 1 in 10,000 per year, and receives a wage of $60,000 per year. What value of a human life for workers with these characteristics should a cost-benefit analyst use?  

3. Manufacturers in an urban environment are currently producing 25,000 widgets per year. Their gross revenue is $300 per widget with variable costs of $125 per widget. Air quality in the city has fallen to a level of 20 points measured on a 0-100 scale. Three proposals could improve the air quality. Option I involves annual direct costs of $100,000 which raises the air quality index to 32; option 2 costs $130,000 per year and raises the index to 42; option 3 costs $150,000 per year and raises the index to 50. Also producers are required to reduce their widget output by: 5% under option 1, 10% under option 2, and 15% under option 3.

a. Which option has the lowest total opportunity cost?

b. Which option has the lowest cost per unit of air quality improvement?

c. Why might neither of these be the most efficient?

Apple Case- Segregation of  Duties-Chapter 5 Extra Credit

Apple sells all products on 30 day trade credit. Ernst & Young CPAs is performing an audit of Apple and is becoming familiar with the department documents of the beverage wholesaler. Ernst & Young CPAs is hoping that they can reduce control risk to a minimum level but only if control activities are found which include segregation of duties and safeguarding of assets. For each numbered item choose which department within the organization is likely to perform each task for proper internal control. Choose only 1 department. If the department is not listed, choose “None Of The Above”.

List 1

Billing-Revenue Cycle

Sale-Revenue Cycle

Credit-Revenue Cycle

Shipping-Revenue Cycle

Receiving-Expenditures Cycle-unless Returns

Warehouse-Expenditues and Revenue Cycles

Vouchers Payable-Expenditures Cycle

Accounts Receivable-Revenue Cycle

Cash Disbursements-Expenditures Cycle

Human Resources

Payroll

None Of The Above

1. In the Revenue Cycle, the department that should not be allowed to authorize a bad debt write-off once permission is granted.      __________________________ department
2. In the Payroll Cycle, the department that maintains hiring date, department, salary, and position.  _______________________department
3. In the Revenue Cycle, the department that should approve the sales order before the goods are shipped to the customer.  ___________________________ department
4. In the Expenditure Cycle, the department that should approve the voucher and record payment to the vendor after the payment is made but should not be allowed to mail the check. ____________________________ department
5. In the Revenue Cycle, the department that should prepare the sales invoice is the _________________ department
6. In the Expenditures Cycle, the department that should receive a “blind copy” of the purchase order (has item ordered information but not quantities ordered) and prepare a document indicating what goods arrived from the vendor_____________________________ department
7. In the Payroll Cycle, what department should approve hours worked including overtime hours. __________________________
8. In the Payroll Cycle, the department that should handout payroll checks to employees that do not receive direct deposit. _________________________________
9. In the Revenue Cycle, the department that should only be allowed to move goods within the company and not send goods outside to the customer. ______________________________
10. In the Expenditure Cycle, the department that should match up the purchase order and receiving report. _________________________________

Apple Case- Segregation of Duties

Apple sells all products on 30 day trade credit. Ernst & Young CPAs is performing an audit of Apple and is becoming familiar with the department documents of the beverage wholesaler. Ernst & Young CPAs is hoping that they can reduce control risk to a minimum level but only if control activities are found which include segregation of duties and safeguarding of assets. For each numbered item choose which department within the organization is likely to perform each task for proper internal control. Choose only 1 department. If the department is not listed, choose “None Of The Above”.

List 1

Billing-Revenue Cycle

Sale-Revenue Cycle

Credit-Revenue Cycle

Shipping-Revenue Cycle

Receiving-Expenditures Cycle-unless Returns

Warehouse-Expenditues and Revenue Cycles

Vouchers Payable-Expenditures Cycle

Accounts Receivable-Revenue Cycle

Cash Disbursements-Expenditures Cycle

Human Resources

Payroll

None Of The Above

1. In the Revenue Cycle, the department that should not be allowed to authorize a bad debt write-off once permission is granted.      __________________________ department
2. In the Payroll Cycle, the department that maintains hiring date, department, salary, and position. _______________________department
3. In the Revenue Cycle, the department that should approve the sales order before the goods are shipped to the customer. ___________________________ department
4. In the Expenditure Cycle, the department that should approve the voucher and record payment to the vendor after the payment is made but should not be allowed to mail the check. ____________________________ department
5. In the Revenue Cycle, the department that should prepare the sales invoice is the _________________ department
6. In the Expenditures Cycle, the department that should receive a “blind copy” of the purchase order (has item ordered information but not quantities ordered) and prepare a document indicating what goods arrived from the vendor_____________________________ department
7. In the Payroll Cycle, what department should approve hours worked including overtime hours. __________________________
8. In the Payroll Cycle, the department that should handout payroll checks to employees that do not receive direct deposit. _________________________________
9. In the Revenue Cycle, the department that should only be allowed to move goods within the company and not send goods outside to the customer. ______________________________
10. In the Expenditure Cycle, the department that should match up the purchase order and receiving report. _________________________________

The long-term care center has 225 beds and provides the highest level of patient care, according to ongoing Department of Health Services annual surveys. The Director of the long-term center has the overall responsibility of ensuring the continuing high level of quality outcomes while also concurrently keeping the facility as risk free as practical. You and the Director have just returned from an annual Long-Term Care Association symposium where you were both introduced to some new groundbreaking initiatives regarding the differences between risk management and quality improvement. Earlier in the week, the Director called for a meeting of the center’s department managers, including the Quality Assurance Nurse and the Manager of Risk Management. After briefing them on the symposium talking points, your Director asks you to come up with a working plan and strategy for how the facility will use both of the concepts you have introduced to arrive at a more centralized and standardized approach. Overall, the desired outcomes focus on adopting a new approach to higher quality with fewer risk factors for the organization. Later that week, the Manager of Risk Management, the Manager of Nursing Quality Assurance, and a representative from Human Resources met to formulate a new plan to reduce the litigation exposure while concurrently increasing the quality of patient outcomes. They set about the complex set of tasks with the expectation that you, as the Director’s designated facilitator, will be closely reviewing their final recommendations. Provide a 250-word executive summary of the research project and recommended plan of action that you will provide to the Director. Address the following: Questions: 1. What is the necessary background information needed to complete your executive summary?Who are the stakeholders? 2. How do the facility’s current Continuous Quality Improvement (CQI) outcomes correspond with the current litigation prevention systems? 3. What factors within the nursing units are the most critical to consider when examining higher quality outcomes? 4. What factors within the nursing units are the most critical to consider when examining lower litigation adverse actions and operational impact? 5. What future steps must be taken to accomplish this directive?

In 1980's India's GDP per capita and China's GDP per capita were about the same, with the former slightly higher than the latter. In the next three decades, however, China economy grow faster than India economy. In this question, I want you to provide explanations to explain why China economy grow faster than India economy. Your explanations should be based on the course materials and the facts I provide below. In other words, you do not need to do any extra research to answer this question.

Here are the three facts/events between China and India:

1) China adopt a so-called One Child Policy and as a result, China population growth rate is lower than India population growth rate.

2) China saving rate is higher than India saving rate. For example, economists at the IMF estimate that China saving rate is about 45.8% of its GDP in 2015, where as India saving rate is about 28.8% of its GDP for the same period.

3) According to Wharton magazine in 2015, China invests approximate 50% of its GDP to build infrastructure (such as building high speed railroad, airports, etc.) where India invests only 30% of its GDP for the same purpose.

In this question, you must utilize two of the three abovementioned facts/events to provide explanations. One of the facts/events must be fact (1) i.e. the One Child Policy. For the second facts/events, you can choose either fact (2) or fact (3), but not both.

To give you an idea the length of the answer, let me provide you with an example. This below paragraph is just for a single fact, so I expect two paragraphs (one for each fact)

"China spending on education is about 4% of its GDP, slightly higher than India (3%). Higher spending on education certainly help to accumulate a larger amount of human capital. With a more educated labor forces, China's worker productivity will be higher than their Indian counterparts."

Thank you!!

Can you do in excel please

The Air Marshal Co. has recently completed a $10,000,000 two-year marketing study.  Based on the results of this study, Air Marshal has estimated that 800 units of its new security electro-optical human scanning hardware, known as "Marshal Dillon," could be sold annually over the next 12 years, at a price of $110,000 the first year with an estimated 2% annual rise from inflation in years 2-6.  The sales price is expected to drop to $90,000 in year 7 due to increasing competition with 2% annual increase for year 8-12.  Variable costs per unit are $45,000 with an estimated 4% annual rise from inflation in years 2-12 and incremental cash fixed costs total $15 million per year all 12 years.   

Start-up costs include $120 million to build production facilities and an additional $10,000,000 for shipping and installation costs, $25 million for land, and net operating working capital is projected to be 12% of next year sakes. The production facility will be depreciated on a straight-line basis to a value of zero over the twelve-year life of the project.  At the end of the project's life, the facilities (including the land) will be sold for an estimated $25 million.  The value of the land is not expected to change during this time period.

Finally, start up would also entail one-time tax-deductible cash expenses of $5 million at year zero.  Air Marshal is an ongoing, profitable business and pays taxes at a 32% rate.  Air Marshal has a 10% opportunity cost of capital for projects such as this one.  

Be sure to answer to the following questions and express your numbers in millions of dollars where appropriate.   If your annual income should be a loss, assume that tax could be saved from other profitable parts of the company.

1. Please estimate the cash flows for all 12 years and provide a detailed statement of projected cash flows, as was done in the sample quiz solution.
2. Calculate the following for the project:  NPV, IRR, and MIRR.
3. Should Air Marshal proceed with the Marshal Dillon project?