...of insurance plans for employees. Employers make difficult decisions to determine how to continue to provide health insurance at a fair and reasonable price, without harming the small business. The case study by Spencer (2014) examines the options of small business owners, John and Liza, faced with a 25% increase in health insurance rates. Once it is determined that the increase is due to the age and health status of several employees, the owner must decide whether to penalize certain employees with increased contributions, or have all workers absorb the added costs equally. In addition, there is concern that hiring a potential new employee, Robert, will increase insurance rates even further due to the pre-existing health condition of his spouse. It is challenging to select an option that has a fair and balanced impact on the company and its employees. While financially it is easiest for the company to have each employee absorb the cost of the premium increase, this is not a fair option if premium increases for all are due to the lifestyle factors of a small representation. There is an increased risk of turnover with a substantial rise in employee premium portions, as well as a negative impact on morale and recruitment. John and Liza will need to consider the possible cost of turnover when determining the best plan for the company. One option John and Liza have is to charge their employee Mary a higher contribution rate due to the fact she is a woman. Women face unfair and...
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...Knowledge Checks: Multiple Choice Questions and Solutions FINANCIAL REPORTING Version 15b KNOWLEDGE CHECKS: MULTIPLE CHOICE QUESTIONS AND SOLUTIONS | i Contents Questions 1 Module 1 Question 1.1 Question 1.2 Question 1.3 Question 1.4 Question 1.5 Question 1.6 Question 1.7 Question 1.8 Question 1.9 Question 1.10 Question 1.11 Question 1.12 Question 1.13 Question 1.14 Question 1.15 Question 1.16 Question 1.17 Module 2 Question 2.1 Question 2.2 Question 2.3 Question 2.4 Question 2.5 Question 2.6 Question 2.7 Question 2.8 Question 2.9 Question 2.10 Question 2.11 Question 2.12 Question 2.13 Question 2.14 Question 2.15 Module 3 Question 3.1 Question 3.2 Question 3.3 Question 3.4 Question 3.5 Question 3.6 Question 3.7 Question 3.8 Question 3.9 Question 3.10 Question 3.11 Question 3.12 R:\Workgroups\CPA-Production\CPA Digitisation\2nd Semester 2015\FR\FR-Knowledge-check-MCQ_15b.docx 1 1 1 1 1 2 2 2 2 3 3 3 4 4 4 5 5 6 6 6 7 7 7 8 8 8 9 9 9 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 DTP: Jen, Leigh, Mira 2nd set 15b 22-07-15 ii | FINANCIAL REPORTING Module 4 Question 4.1 Question 4.2 Question 4.3 Question 4.4 Question 4.5 Question 4.6 Question 4.7 Question 4.8 Question 4.9 Question 4.10 Question 4.11 Question 4.12 Question 4.13 Question 4.14 Question 4.15 Question 4.16 Question 4.17 Question 4.18 Module 5 Question...
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...CGA-CANADA ACCOUNTING THEORY & CONTEMPORARY ISSUES [AT1] EXAMINATION March 2009 Time: 3 Hours Note: All references to the Handbook refer to the CICA Handbook. Marks 28 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. Which of the following statements applies to the efficient contracting version of positive accounting theory? 1) Earnings management is not necessarily unethical. 2) Firms should design managerial compensation contracts with a high proportion of compensation based on net income. 3) Debt contracts typically contain covenants based on accounting variables. 4) Financial reporting should not be conservative. b. Which of the following statements best captures the meaning of the decision usefulness approach to financial reporting? 1) 2) 3) 4) c. The decision usefulness approach helps standard setters design successful accounting standards. The decision usefulness approach ensures that accountants and auditors behave ethically. The decision usefulness approach encourages the supply of useful information to investors. The decision usefulness approach supports...
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...recognition of SBC costs could lower the reported earnings by as much as 50% and would adversely affect stock prices (Berton, 1993).A study by R.G. Associates Inc. found that in the year 2000, stock options overstated the earnings of the S&P companies by 9% (Geewax, 2002). For 2001, the average earnings of S&P companies would have been 23% lower if options were expensed (Weil & Segal, 2002). Botosan and Plumlee (2001) examined the effect of stock option expense on diluted EPS and Return on Assets (ROA) of 100 high growth US companies Based on an assessment of the SFAS 123 disclosures, these authors report that stock option expense has a material impact on diluted EPS and ROA for a majority of their sample companies. They also note that expensing of stock-based compensation is void if the financial impact of doing so is immaterial. Financial press reports suggest that Australian firms’ reported profits could be “collectively stripped of hundreds of millions in reported net profit” if accounting standards require the expensing of employee options ((2002) (August), p. 15.Oldfield, 2002). Merrill Lynch (Revell, 2004) reports that the average reduction in S&P 500 firms’ 2001 (2002) reported earnings would be 21% (23%) if stock options were expensed. More recent research also finds similar results. Using stock option disclosures, recent studies provide evidence that if stock-based compensation were to be expensed, it would significantly affect key financial performance measures...
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...How Fair Value Measurement Changes Risk Management Behavior in the Insurance Industry JANUARY 2013 SPONSORED BY Financial Reporting Section Society of Actuaries PREPARED BY Bruce B. Rosner, FSA, MAAA Ernst & Young LLP Mark J. Freedman, FSA, MAAA Ernst & Young LLP The opinions expressed and conclusions reached by the authors are their own and do not represent any official position or opinion of the Society of Actuaries or its members. The Society of Actuaries makes no representation or warranty to the accuracy of the information. In addition, the discussion and examples presented in this paper are for educational purposes. They are not to be viewed as an authoritative statement by the Society of Actuaries or Ernst & Young LLP on the quality and/or appropriateness of an individual company’s practices or an indicator of “better” practice from one company relative to another. © 2013 Society of Actuaries, All Rights Reserved Acknowledgments We would like to acknowledge and thank a number of individuals who contributed to the success of this study: • Ronora Stryker and Jan Schuh from the Society of Actuaries for providing leadership and coordination The Project Oversight Group for guidance throughout this project: • Robert Baldwin • Mark Bergstrom • Jim Bridgeman • Joonghee Huh • Kathryn McCarthy (Chair) • James Norman • Jim Reiskytl • Doug Van Dam The companies that volunteered to be interviewed anonymously for this study Other members of the Ernst & Young team who...
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...SHAHEED SUKHDEV COLLEGE OF BUSINESS STUDIES | Indian and Chinese Derivative Markets | A Comparative Analysis | Submitted to: Dr. Kumar BijoyBy: Anney Banderwal - 75112Larika Azad- 75130Ayushi Sharma- 751142/18/2014 | Contents Acknowledgement 3 Introduction 4 History and Evolution 4 Medieval Europe 5 A Major Step Forward 6 The New World 7 The Computer Age 8 India 8 China 10 Comparative Study 12 Exchanges and Instruments 12 Regulatory Aspects 14 India 14 China Regulatory Framework 19 Conclusion 26 Bibliography 27 Acknowledgement We would like to take this opportunity to thank all those who have helped us in completing this project report. First of all we would like to thank our teacher Dr. Kumar Bijoy for guiding us throughout this project. Then we would like to thank our parents for their immense support. In the end we would like to thank GOD almighty for giving us strength to complete this project. Introduction A derivative is a financial contract which derives its value from the performance of another entity such as an asset, index, or interest rate, called the "underlying". Derivatives are one of the three main categories of financial instruments, the other two being equities (i.e. stocks) and debt (i.e. bonds and mortgages). Derivatives include a variety of financial contracts, including futures, forwards, swaps, options, and variations of these such as caps, floors, collars, and credit default swaps. Most derivatives...
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...Content Content | 1 | Case I | 2 | Case II | 11 | Case III | 20 | References | 30 | Coursework | 31 | Case Study I The Globalization of Starbucks Thirty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium-roasted coffee. Today it is a global roaster and retailer of coffee with some 17,000 stores, 40% of which are in 50 countries outside the United States. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format – and the Starbucks experience was born. The strategy was to sell the company’s own premium-roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling a “third place” experience, rather than just the coffee. The formula led to spectacular success in the US, where Starbucks went from obscurity to one of the best-known brands in the country with over 137,000 employees and $10.7 billion in annual revenues. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the Web. In 1995, with 700 stores...
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...Hellmann ⁎, Hector Perera 1, Chris Patel 2 Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Sydney, NSW 2109, Australia a r t i c l e i n f o Keywords: Convergence German Commercial Code (Handelsgesetzbuch) International Financial Reporting Standards Act to Modernize Accounting Law (Bilanzrechtsmodernisierungsgesetz) Classification of accounting systems a b s t r a c t Classification techniques based on one or few dimensions are widely used in research studies and textbooks to explain and predict the development of accounting systems internationally. However, their usefulness in international accounting has been limited in today's globalized world. For example, in the context of the EU, IFRS are required for consolidated accounting, while national accounting systems continue to be the dominant system for unconsolidated accounting in many countries. Using Germany as a case study, the objective of this paper is to examine whether Germany can still be classified within the Continental European model of accounting following the Act to Modernize Accounting Law (Bilanzrechts-modernisierungsgesetz — BilMoG), which was promulgated on May 29, 2009. This Act introduced some major reforms to the German Commercial Code (Handelsgesetzbuch — HGB), such as removing the close connection to tax rules and introducing new recognition and valuation regulations, which changed traditional principles of orderly accounting ...
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...Claremont Colleges Scholarship @ Claremont CMC Senior Theses CMC Student Scholarship 2011 The Effect of Culture on the Implementation of International Financial Reporting Standards Mitchell A. Skotarczyk Claremont McKenna College Recommended Citation Skotarczyk, Mitchell A., "The Effect of Culture on the Implementation of International Financial Reporting Standards" (2011). CMC Senior Theses. Paper 165. http://scholarship.claremont.edu/cmc_theses/165 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact scholarship@cuc.claremont.edu. CLAREMONT McKENNA COLLEGE THE EFFECT OF CULTURE ON THE IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS SUBMITTED TO PROFESSOR MARC MASSOUD AND DEAN GREGORY HESS BY MITCHELL SKOTARCZYK FOR SENIOR THESIS SPRING 2011 2 Table of Contents I. Introduction…………………….……………………………………………………………….4 II. Literature Summary………………………………………...………………...….……………..5 III. IFRS……………………...……………………………………………………..……………11 IV. Carve-outs…………………………………………………………………………………....18 V. Culture and Accounting………………………………………………………………………25 VI. Conclusion………………………………………………………………...…………………30 Appendix………………………………………………………………………………………...32 Bibliography……………………………………………………………………………………..37 3 I. Introduction As globalization increases at a blistering pace, more...
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...SFAC # 7 –Present Value of Expected Cash Flows versus Exit Value As a Proxy for Fair Value Yolando Robinso SFAC 7 asserts that present value techniques should be used to estimate fair value and recommends using an expected cash flow approach. Critically discuss the contents of this SFAC and critically compare it to using exit value as the proxy for fair market value. Statement of Financial Accounting Concepts (SFAC) No. 7 was introduced by Financial Accounting Standards Board (FASB) in February 2000 as an answer to a need. To begin, let us first see what was needed. Traditionally, professionals have used the Historical Model for valuation of assets, both tangible and intangible. However, as the use of present value techniques became more widely used in accounting and financial fields, it raised questions and discussions prompting the introduction of SFAC 7. It is designed to offer guidance on present value techniques in accounting measurements . “It is expected to serve the public interest by providing structure and direction to financial accounting and reporting to facilitate the provision of evenhanded financial and related information that helps promote the efficient allocation of scarce resources in the economy and society, including assisting capital and other markets to function efficiently.” We understand that the public is interested in the amount, timing and uncertainty of future cash flow, which will allow them to come to a consensus affecting the market price...
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...to be a going concern. d. Currently, the debtor has securities that have been delisted, are in the process of being delisted, or are under the threat of being delisted from an exchange e. Based on estimates and projections that only encompass the current business capabilities, the debtor forecasts that its entity-specific cash flows will be insufficient to service the debt (both interest and principal) in accordance with the contractual terms of the existing agreement through maturity. f. Absent the current modification, the debtor cannot obtain funds from the sources other than the existing creditors at an effective interest rate equal to the current market interest rate for similar debt for a nontroubled debtor. According to the study Resort Co. appears to be in violation of A. The company defaulted on a debt instrument with Bank C which resulted in a cross default with the original debt with Bank A and Bank B. ASC 470-60-15-5, 6, 9 provide relevant implementation guidance in whether or not the creditor grants a...
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...Workplace flexibility for hourly lower-wage employees the necessities of work-life balance strategies: * A study using data from the 2002 National Study of the Changing Workplace implies that employees with greater access to temporal forms of flexible work options report less stress, fewer work absences, and fewer tardiness incidents (Halpern, 2005) Method This study was conducted in collaboration with a Fortune 100 retail firm. The firm operates over 6200 stores in 38 states in US. Results Six primary forms of flexible work practices were identified from managers’ interview. 1. Schedule preference * Permitting employees to have some choice into the times and days that they are scheduled to work. * Within this context, managers suggested two practices: a. Preference for specific days, shifts, or hours. This option allows workers to coordinate their work schedule with their off-the-job responsibilities, such as working another job, attending classes, and providing care to a loved one or fix work schedules with those of other family members. b. Preference for a set, routine schedule. This allows employees to work the same shifts or same days each week, enabling them to have predictability in their jobs. 2. Preplanned Schedule Modification This practice gives employees the opportunity to request that they not be scheduled for a particular day or shift prior to the creation of the weekly schedule. It is good for employees to request 2 weeks...
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...One solution that I believe can ultimately help replace juvenile life without parole is sentencing juveniles to incarceration in a juvenile facility until they are of legal age, which is eighteen years old, and then place them in an adult correction facility while receiving rehabilitation for twenty years or less and then released on parole. This idea still maintains fair punishment for juveniles, while still giving them a chance to be released. This idea balances out punishment and rehabilitation perfectly and it is not focused on just punishment. It also allows for the juvenile to receive rehabilitation for enough time to be considered safe to reintegrate back into the community. This solution will give the juvenile a chance to comprehend his or her mistakes and learn from them. They will receive mandatory rehabilitation for a lengthy time in...
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...1. What gives rise to the currency exposure at AIFS? American Institute for Foreign Study (AIFS) is a student exchange organization. It organizes exchange programs in education and culture throughout the world with two of its major divisions serving American students traveling abroad in the Study Abroad College division and High School Travel division. AIFS receives their revenues in American Dollars (USD) but incurs their costs and expenses in a foreign currency, mainly in the Euro (EUR) and the British Pound (GBP). AIFS’s currency is exposed to changes in the foreign exchange rate, therefore their gain or loss is determined by the appreciation or depreciation of the American dollar in the foreign market. In order for AIFS to protect its assets they need to hedge their currency in forward contracts and options to reduce currency exposure risks. There are three types of currency risks: the bottom-line risk, the volume risk and competitive pricing risk. AIFS starts to hedge foreign currencies between 6 months and 2 years prior to the main pricing date and the implement forward contracts and currency options (primarily forward contracts) to hedge currency exposure risks. AIFS establishes its pricing in advance and guarantees that price, so if the market changes they will still honor the set price. The Bottom-line Risk Adverse changes in exchange rates against the dollar without hedging could increase costs because AIFS requires large sums of money to cater to their clients...
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...BUS 499 – Business Administration Capstone (Prerequisite: To be taken as last or next to last course) COURSE DESCRIPTION This course is the capstone course for the Bachelor of Business Administration program. It examines the processes by which organizations formulate strategy, implement policy, and evaluate outcomes in the highly competitive and dynamic global environment. The ethical implications of strategic choices are a central concern of this course. Analytic, integrative, and decision-making skills will be exercised through the use of case analysis and decision making. INSTRUCTIONAL MATERIALS Required Resources Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2011). Strategic management: Competitiveness and globalization, concepts and cases: 2011 custom edition (9th ed.). Mason, OH: South-Western Cengage Learning. Supplemental Resources Angwin, D., Paroutis, S., & Mitson, S. (2009). Connecting up strategy: Are senior strategy directors a missing link? California Management Review, 51(3), 74-94. Derfus, P. J., Maggitti, P. G., Grimm, C. M., & Smith, K. G. (2008). The red queen effect: Competitive actions and firm performance. Academy of Management Journal, 51(1), 61-80. Franken, A., Ewards, C., & Lambert, R. (2009). Executing strategic change: Understanding the critical management elements that lead to success. California Management Review, 51(3), 49-73. COURSE LEARNING OUTCOMES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Identify the vision, mission, and stakeholders...
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