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[主观题]

（b) The chief executive of Xalam Co, an exporter of specialist equipment, has asked for ad

(b) The chief executive of Xalam Co, an exporter of specialist equipment, has asked for advice on the accounting

treatment and disclosure of payments made for security consultancy services. The payments, which aim to

ensure that consignments are not impounded in the destination country of a major customer, may be material to

the financial statements for the year ending 30 June 2006. Xalam does not treat these payments as tax

deductible. (4 marks)

Required:

Identify and comment on the ethical and other professional issues raised by each of these matters and state what

action, if any, Dedza should now take.

NOTE: The mark allocation is shown against each of the three situations.

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更多“（b) The chief executive of Xal…”相关的问题

第1题

Furlion Co manufactures heavy agricultural equipment and machinery which can be used in di

fficult farming conditions. Furlion Co’s chief executive has been investigating a significant opportunity in the country of Naswa, where Furlion Co has not previously sold any products. The government of Naswa has been undertaking a major land reclamation programme and Furlion Co’s equipment is particularly suitable for use on the reclaimed land. Because of the costs and other problems involved in transporting its products, Furlion Co’s chief executive proposes that Furlion Co should establish a plant for manufacturing machinery in Naswa. He knows that the Naswan government is keen to encourage the development of sustainable businesses within the country.

Initial calculations suggest that the proposed investment in Naswa would have a negative net present value of $1·01 million. However, Furlion Co’s chief executive believes that there may be opportunities for greater cash flows in future if the Naswan government expands its land reclamation programme. The government at present is struggling to fund expansion of the programme out of its own resources and is looking for other funding. If the Naswan government obtains this funding, the chief executive has forecast that the increased demand for Furlion Co’s products would justify $15 million additional expenditure at the site of the factory in three years’ time. The expected net present value for this expansion is currently estimated to be $0.

It can be assumed that all costs and revenues include inflation. The relevant cost of capital is 12% and the risk free rate is 4%. The chief executive has estimated the likely volatility of cash flows at a standard deviation of 30%.

One of Furlion Co’s non-executive directors has read about possible changes in interest rates and wonders how these might affect the investment appraisal.

Required:

(a) Assess, showing all relevant calculations, whether Furlion Co should proceed with the significant opportunity. Discuss the assumptions made and other factors which will affect the decision of whether to establish a plant in Naswa. The Black Scholes pricing model may be used, where appropriate. (16 marks)

(b) Explain what is meant by an option’s rho and discuss the impact of changes in interest rates on the appraisal of the investment. (5 marks)

(c) Discuss the possibility of the Naswan government obtaining funding for further land reclamation from the World Bank, referring specifically to the International Development Association. (4 marks)

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第2题

The Chairman and the Chief Executive Officer （CEO) of Kengai Co are discussing whether or

The Chairman and the Chief Executive Officer (CEO) of Kengai Co are discussing whether or not the company should adopt a triple bottom line (TBL) reporting system in order to demonstrate Kengai Co’s level of sustainable development. Kengai Co’s competitors are increasingly adopting TBL reporting and the Chairman feels that it would be beneficial to follow suit. The CEO, on the other hand, feels that pursuing TBL reporting would be expensive and is not necessary.

Required:

(a) Explain what TBL reporting involves and how it would help demonstrate Kengai Co’s sustainable development. Support your explanation by including examples of proxies that can be used to indicate the impact of the factors that would be included in a TBL report. (8 marks)

(b) Discuss how producing a TBL report may help Kengai Co’s management focus on improving the financial position of the company. Illustrate the discussion with examples where appropriate. (10 marks)

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第3题

（a) Contrast the role of internal and external auditors. （8 marks)（b) Conoy Co designs and

(a) Contrast the role of internal and external auditors. (8 marks)

(b) Conoy Co designs and manufactures luxury motor vehicles. The company employs 2,500 staff and consistently makes a net profit of between 10% and 15% of sales. Conoy Co is not listed; its shares are held by 15 individuals, most of them from the same family. The maximum shareholding is 15% of the share capital.

The executive directors are drawn mainly from the shareholders. There are no non-executive directors because the company legislation in Conoy Co’s jurisdiction does not require any. The executive directors are very successful in running Conoy Co, partly from their training in production and management techniques, and partly from their ‘hands-on’ approach providing motivation to employees.

The board are considering a significant expansion of the company. However, the company’s bankers are

concerned with the standard of financial reporting as the financial director (FD) has recently left Conoy Co. The board are delaying provision of additional financial information until a new FD is appointed.

Conoy Co does have an internal audit department, although the chief internal auditor frequently comments that the board of Conoy Co do not understand his reports or provide sufficient support for his department or the internal control systems within Conoy Co. The board of Conoy Co concur with this view. Anders & Co, the external auditors have also expressed concern in this area and the fact that the internal audit department focuses work on control systems, not financial reporting. Anders & Co are appointed by and report to the board of Conoy Co.

The board of Conoy Co are considering a proposal from the chief internal auditor to establish an audit committee.

The committee would consist of one executive director, the chief internal auditor as well as three new appointees.

One appointee would have a non-executive seat on the board of directors.

Required:

Discuss the benefits to Conoy Co of forming an audit committee. (12 marks)

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第4题

Saxophone Enterprises Co （Saxophone) has been trading for 15 years selling insurance and h

Saxophone Enterprises Co (Saxophone) has been trading for 15 years selling insurance and has recently become a listed company. In accordance with corporate governance principles Saxophone maintains a small internal audit department. The directors feel that the team needs to increase in size and specialist skills are required, but they are unsure whether to recruit more internal auditors, or to outsource the whole function to their external auditors, Cello & Co.

Saxophone is required to comply with corporate governance principles in order to maintain its listed status; hence the finance director has undertaken a review of whether or not the company complies.

Bill Bassoon is the chairman of Saxophone, until last year he was the chief executive. Bill is unsure if Saxophone needs more non-executive directors as there are currently three non-executive directors out of the eight board members. He is considering appointing one of his close friends, who is a retired chief executive of a manufacturing company, as a non-executive director.

The finance director, Jessie Oboe, decides on the amount of remuneration each director is paid. Currently all remuneration is in the form. of an annual bonus based on profits. Jessie is considering setting up an audit committee, but has not undertaken this task yet as she is very busy. A new sales director was appointed nine months ago. He has yet to undertake his board training as this is normally provided by the chief executive and this role is currently vacant.

There are a large number of shareholders and therefore the directors believe that it is impractical and too costly to hold an annual general meeting of shareholders. Instead, the board has suggested sending out the financial statements and any voting resolutions by email; shareholders can then vote on the resolutions via email.

Required:

(a) Explain the advantages and disadvantages for each of Saxophone Enterprises Co AND Cello & Co of outsourcing the internal audit department.

Note: The total marks will be split as follows:

Saxophone Enterprises Co (8 marks)

Cello & Co (2 marks) (10 marks)

(b) In respect of the corporate governance of Saxophone Enterprises Co:

(i) Identify and explain FIVE corporate governance weaknesses; and

(ii) Provide a recommendation to address each weakness.

Note: The total marks will be split equally between each part. (10 marks)

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第5题

The chief executive officer （CEO) of Faoilean Co has just returned from a discussion at a

The chief executive officer (CEO) of Faoilean Co has just returned from a discussion at a leading university on the ‘application of options to investment decisions and corporate value’. She wants to understand how some of the ideas which were discussed can be applied to decisions made at Faoilean Co. She is still a little unclear about some of the discussion on options and their application, and wants further clarification on the following:

(i) Faoilean Co is involved in the exploration and extraction of oil and gas. Recently there have been indications that there could be significant deposits of oil and gas just off the shores of Ireland. The government of Ireland has invited companies to submit bids for the rights to commence the initial exploration of the area to assess the likelihood and amount of oil and gas deposits, with further extraction rights to follow. Faoilean Co is considering putting in a bid for the rights. The speaker leading the discussion suggested that using options as an investment assessment tool would be particularly useful to Faoilean Co in this respect.

(ii) The speaker further suggested that options were useful in determining the value of equity and default risk, and suggested that this was why companies facing severe financial distress could still have a positive equity value.

(iii) Towards the end of the discussion, the speaker suggested that changes in the values of options can be measured in terms of a number of risk factors known as the ‘greeks’, such as the ‘vega’. The CEO is unclear why option values are affected by so many different risk factors.

Required:

(a) With regard to (i) above, discuss how Faoilean Co may use the idea of options to help with the investment decision in bidding for the exploration rights, and explain the assumptions made when using the idea of options in making investment decisions. (11 marks)

(b) With regard to (ii) above, discuss how options could be useful in determining the value of equity and default risk, and why companies facing severe financial distress still have positive equity values. (9 marks)

(c) With regard to (iii) above, explain why changes in option values are determined by numerous different risk factors and what ‘vega’ determines. (5 marks)

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第6题

3 At a recent international meeting of business leaders, Seamus O’Brien said that multi-ju

risdictional attempts to

regulate corporate governance were futile because of differences in national culture. He drew particular attention to

the Organisation for Economic Co-operation and Development (OECD) and International Corporate Governance

Network (ICGN) codes, saying that they were, ‘silly attempts to harmonise practice’. He said that in some countries,

for example, there were ‘family reasons’ for making the chairman and chief executive the same person. In other

countries, he said, the separation of these roles seemed to work. Another delegate, Alliya Yongvanich, said that the

roles of chief executive and chairman should always be separated because of what she called ‘accountability to

shareholders’.

One delegate, Vincent Viola, said that the right approach was to allow each country to set up its own corporate

governance provisions. He said that it was suitable for some countries to produce and abide by their own ‘very

structured’ corporate governance provisions, but in some other parts of the world, the local culture was to allow what

he called, ‘local interpretation of the rules’. He said that some cultures valued highly structured governance systems

while others do not care as much.

Required:

(a) Explain the roles of the chairman in corporate governance. (5 marks)

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第7题

Bluebird Enterprises Co （Bluebird) is a retail company planning to list on a stock exchang

Bluebird Enterprises Co (Bluebird) is a retail company planning to list on a stock exchange within the next six months, and management has been advised by the company’s auditors about the need for compliance with corporate governance provisions. In particular, the finance director is looking to recruit non-executive directors as he understands that Bluebird will need to establish an audit committee.

The finance director has two potential non-executive directors whom he is considering approaching to join the board of Bluebird. Antony Goldfinch is currently an executive sales director of a listed multi-national banking company; he sits on an audit committee of another company as a non-executive director and is agreeable to being paid a fixed fee which is not related to profits. Jacob Mallard is currently a finance director of a small retail company, which does not compete with Bluebird; he has expressed an interest in a fixed seven year contract and he is the brother of Bluebird’s chief executive.

Required

(a) Explain the benefits to Bluebird Enterprises Co of establishing an audit committee. (4 marks)

(b) Discuss the advantages and disadvantages of appointing:

(i) Anthony Goldfinch; and

(ii) Jacob Mallard

as non-executive directors of Bluebird Enterprises Co.

Note: The total marks will be split equally between each part. (6 marks)

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第8题

（b) Assess the benefits of the separation of the roles of chief executive and chairman tha

(b) Assess the benefits of the separation of the roles of chief executive and chairman that Alliya Yongvanich

argued for and explain her belief that ‘accountability to shareholders’ is increased by the separation of these

roles. (12 marks)

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第9题

“Executive vice president, president, managing director, chief operating officer, chie

A.team leaders

B.middle managers

C.first-line managers

D.top managers

E.subordinates

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第10题

At last John Smith chose to step down as the company’s chief executive and return to h

is roots in software research.

A． resign

B. remove

C． retire

D. replace

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