Question: Describe the process followed when estimating bad

> What is the most important contribution of a professional code of conduct or corporate code of conduct?

> What is meant by the term "fiduciary relationship"?

> If an auditor’s fee is paid from the client company, isn’t there a conflict of interests that may lead to a lack of objectivity? Why doesn’t it?

> Can a professional accountant serve two clients whose interest’s conflict? Explain.

> If you were a professional accountant, and you discovered your superior was inflating his or her expense reports, what would you do?

> If you were a management accountant, would you buy a product from a supplier for personal use at 25% off list?

> If you were an auditor, would you buy a new car at a dealership you audited for 17% off list price?

> If the provision of management advisory services can create conflicts of interest, why are audit firms still offering them?

> An auditor naturally wishes his or her activity to be as profitable as possible, but when, if ever, should the drive for profit be tempered?

> Which type of conflict of interest should be of greater concern to a professional accountant: actual or apparent?

> Why do more professional accountants not report ethical wrongdoing? Consider their awareness and understanding of ethical issues as well as their motivation and courage for doing so.

> 1. Answer the seven questions in the opening section of this chapter. [See Chapter 6, page 385.] • Who really is my client—the company, the management, current shareholders, future shareholders, the public? • In the event I have to make a decision with e

> What is the role of an ethical culture and who is responsible for it?

> How can a company control and manage conflicts of interest?

> Can an apparent conflict of interest where there are adequate safeguards to prevent harm be as important to an executive or a company as one where safeguards are not adequate?

> When should an employee satisfy his or her self-interest rather than the interest of his or her employer?

> What should an employee consider when considering whether to give or receive a gift?

> Explain why corporations are legally responsible to shareholders but are strategically responsible to other stakeholders as well.

> What is the role of a board of directors from an ethical governance standpoint?

> Do professional accountants have the expertise to audit corporate social performance reports?

> Should professional accountants push for the development of a comprehensive framework for the reporting of corporate social performance? Why?

> Descriptive commentary about corporate social performance is sometimes included in annual reports. Is this indicative of good performance, or is it just window dressing? How can the credibility of such commentary be enhanced?

> If Lynn Stout is correct, that the drive for shareholder value is a myth, why do so many companies continue to use it as a goal?

> Why is it suspected that corporate psychopaths gravitate to certain industries, and what should corporations within those industries do about it?

> If you were asked to evaluate the quality of an organization’s ethical leadership, what would the five most important aspects be that you would wish to evaluate, and how would you do so?

> Why should an effective whistle-blower mechanism be considered a “failsafe mechanism” in SOX Section 404 compliance programs?

> Is the SOX-driven effort being made to check on the effectiveness of internal control systems worth the cost? Why and why not?

> How can a corporation integrate ethical behavior into their reward and remuneration schemes?

> How could you monitor compliance with a code of conduct in a corporation?

> Why should codes focus on principles rather than specific detailed rules?

> Are one or more of the fundamental principles found in codes of conduct more important than the rest? Why?

> What is the most important contribution of a corporate code of conduct?

> Must a company be incorporated as a benefit corporation in order to legally consider actions other than those in pursuit of profit?

> From a virtue ethics perspective, why would it be logical to put in place a manufacturing process beyond legal requirements?

> How can a decision to down-size be made as ethically as possible by treating everyone equally?

> How would you convince a CEO not to treat the environment as a cost-free commons?

> Under what circumstances would it be best to use each of the following frameworks: the philosophical set of consequentialism, deontology, and virtue ethics; the modified 5-question; the modified moral standards; and the modified Pastin approach?

> Is the modified 5-question approach to ethical decision making superior to the modified moral standards or modified Pastin approach?

> If a framework for ethical decision making is to be employed, why is it essential to incorporate all four considerations of well-offness, fairness, individual rights and duties, and virtues expected?

> Is it wise for a decision maker to take into account more than profit when making decisions that have a significant social impact? Why?

> Before the recent financial scandals and governance reforms, few corporate leaders were selected for their “virtues” other than their ability to make profits. Has this changed, and if so, why?

> Give an example of behavior that might be unethical even though ‘‘everyone is doing it’’.

> List the companies that have faced ethical tragedies due the following failings in their ethical culture:

> Why should directors, executives, and accountants understand consequentialism, deontology, and virtue ethics?

> Commuters who have more than one passenger in the car are permitted to drive in a special lane on some highways while all the other motorists have to contend with stop-and-go traffic. Does this have anything to do with ethics? If so, then assess this sit

> How does a business executive demonstrate virtue when dealing with a disgruntled shareholder at the annual meeting?

> Assume that Firm A is a publicly-traded company that puts its financial statements on the web. This information can be accessed and read by anyone, even those who do not own shares of Firm A. This a free-rider situation, where an investor can use Firm A

> 1. Identify and explain the conflicts of interest referred to in this case. 2. What additional rules should the SEC make? 3. What should be included in the investor education that the settlement funds are earmarked for? 4. Was it appropriate for the New

> In the absence of any agreement between the partners, how must profits and losses be shared? If the partnership agreement specifies how profits are to be shared, but there is no agreement as to how losses are to be shared, what must be true with respect

> How does the balance in Allowance for Doubtful Accounts before adjustment affect the amount of the year-end adjustment under the percentage of sales method? Under the percentage of receivables method?

> Identify three advantages of a partnership as compared with a sole proprietorship.

> Identify 11 essential provisions of a partnership agreement.

> Describe the accounting procedures when using the direct write-off method to account for uncollectible accounts.

> What are the four most commonly used methods of calculating depreciation for financial reporting purposes? How do they differ in their application?

> Explain how to compute net realizable value.

> Describe the steps to follow when using the allowance method to account for uncollectible accounts.

> What method of accounting for uncollectible accounts is generally required for financial reporting purposes?

> Describe the four accounting entries for the liquidation of a partnership.

> In the formula for calculating interest, how is time computed?

> What is the function of the trial balance?

> What is a footing?

> What does a debit balance in the cash short and over account represent? What does a credit balance in this account represent?

> At what two times would an entry be made affecting the change fund?

> From what source is the information obtained for issuing a check to replenish the petty cash fund?

> Describe the steps followed by the Financial Accounting Standards Board when developing an accounting standard.

> At what two times should the petty cash fund be replenished?

> What should be prepared every time a petty cash payment is made?

> What is the purpose of a petty cash fund?

> Name five common uses of electronic funds transfer.

> What two kinds of items on a bank reconciliation require journal entries?

> What are the three steps to follow in preparing a bank reconciliation?

> What are the most common reasons for differences between the book and bank cash balances?

> What are the three steps to follow in preparing a check?

> Who are the three parties to every check?

> What is the left side of the T account called? the right side?

> Under the allowance method, what impact does the write-off of a customer’s account have on the financial statements?

> What are the three major parts of a T account?

> Why must Work in Process Inventory be adjusted for factory overhead applied at year-end?

> How does the use of a perpetual inventory system affect the accounts on the work sheet?

> Why is the accounting for a manufacturing business more complicated than that for a merchandising business?

> For what three reasons is product cost information needed by a manufacturing business?

> What are the main differences between the financial statements of a manufacturing and a merchandising business?

> Describe the flow of materials, labor, and overhead into Work in Process.

> Describe and give three examples of factory overhead.

> Distinguish between direct and indirect labor.

> What are the two major types of materials, and how do they differ?

> Describe the process followed when estimating uncollectible accounts under the percentage (aging) of receivables method.

> What are the three primary elements of manufacturing cost?

> Distinguish between departmental gross profit, departmental operating income, and departmental direct operating margin.

> Why must management be cautious in interpreting departmental operating income results?

> What information is contained in a departmental operating expense summary?

> On what basis are indirect expenses allocated to departments?

> On what basis are direct expenses assigned to departments?

> What is the difference between direct and indirect operating expenses?

> Why was the increase in FCI’s operating income so much greater than the increase in its net sales?

> What is the difference between a cost center and a profit center?

> Explain the procedure for verifying the accuracy of the statement of cash flows.

> List four items of information about each cash payment entered in the cash payments journal.

> Briefly describe five limitations of financial statement analysis.

> Identify the two market measures calculated by FCI.