. Company Y’s fixed assets have a four-year useful life for financial purpose (which is double the useful life for tax purpose) and are depreciated using the straight-line method.
The effective tax rate for the company is closest to:
(i) Following an investigation you discover that commissions were paid to a senior official in one country to ensure that the local drug licensing agency concerned facilitated the acceptance of one of your principal revenue earning drugs for use within its national health service.
(ii) You have discovered that an agent of your firm, aware that the licensing agreement might be forthcoming,
purchased several call option contracts on your company’s equity.
(iii) A senior member of the firm’s treasury team has been taking substantial positions in currency futures in order to protect the risk of loss on the translation of dollar assets into the domestic currency. Over the last 12 months significant profits have been made but the trades do not appear to have been properly authorised. You discover that a long position in 50, $250,000 contracts is currently held but over the last four weeks the dollar has depreciated by 10% and all the signs are that it will depreciate considerably more over the next two months.
(iv) One drug company has managed to copy a novel drug that you have just released for the treatment of various forms of skin cancer. You have patent protection in the country concerned but your company has not been able to initiate proceedings through the local courts. Contacts with the trade officials at your embassy in the country concerned suggest that the government has made sure that the proceedings have not been allowed to proceed.
The company’s chief financial officer has asked you to look into these issues and, with respect to (iv), any World Trade
Organisation (WTO) agreements that might be relevant, and to advise her on how the company should proceed in each case.
Prepare a memorandum advising the Chief Financial Officer on the issues involved and recommending how she should, in each case and in the circumstances, proceed.
The capital structure of the company has not changed. The projected net income (in $ millions) for 2008 is closest to:
The company’s main contract was with Dank plc a large industrial conglomerate.
In the course of its research activity, Clean Ltd’s scientists developed a new super glue. Des was very keen to pursue the manufacture of the glue but the board of directors overruled him and decided that the company should stick to its core business.
The managing director of Dank plc is a friend of Des’s and has told him that Dank plc will not be renewing its contract with Clean Ltd as he is not happy with its performance. He also told Des that he would be happy to continue to deal with him, if only he was not linked to Clean Ltd.
Following that discussion Des resigned from his position as managing director of Clean Ltd and set up his own company, Flush Ltd which later entered into a contract with Dank plc to replace Clean Ltd. Flush Ltd also manufactures the new glue discovered by Clean Ltd’s scientists, which has proved to be very profitable.
In the context of company law, advise the board of Clean Ltd as to whether they can take any action against Des or Flush Ltd.(10 marks)
(a) You are an audit manager in Weston & Co which is an international firm of Chartered Certified Accountants with branches in many countries and which offers a range of audit and assurance services to its clients. Your responsibilities include reviewing ethical matters which arise with audit clients, and dealing with approaches from prospective audit clients.
The management of Jones Co has invited Weston & Co to submit an audit proposal (tender document) for their consideration. Jones Co was established only two years ago, but has grown rapidly, and this will be the first year that an audit is required. In previous years a limited assurance review was performed on its financial statements by an unrelated audit firm. The company specialises in the recruitment of medical personnel and some of its start up funding was raised from a venture capital company. There are plans for the company to open branches overseas to help recruit personnel from foreign countries.
Jones Co has one full-time accountant who uses an off-the-shelf accounting package to record transactions and to prepare financial information. The company has a financial year ending 31 March 2015.
The following comment was made by Bentley Jones, the company’s founder and owner-manager, in relation to the audit proposal and potential audit fee:
‘I am looking for a firm of auditors who will give me a competitive audit fee. I am hoping that the fee will be quite low, as I am willing to pay more for services that I consider more beneficial to the business, such as strategic advice. I would like the audit fee to be linked to Jones Co’s success in expanding overseas as a result of the audit firm’s advice. Hopefully the audit will not be too disruptive and I would like it completed within four months of the year end.’
(i) Explain the specific matters to be included in the audit proposal (tender document), other than those relating to the audit fee; and (8 marks)
(ii) Assuming that Weston & Co is appointed to provide the audit service to Jones Co, discuss the issues to be considered by the audit firm in determining a fee for the audit including any ethical matters raised. (6 marks)
(b) Ordway Co is a long-standing audit client of your firm and is a listed company. Bobby Wellington has acted as audit engagement partner for seven years and understands that a new audit partner needs to be appointed to take his place. Bobby is hoping to stay in contact with the client and act as the engagement quality control reviewer in forthcoming audits of Ordway Co.
Explain the ethical threats raised by the long association of senior audit personnel with an audit client and the relevant safeguards to be applied, and discuss whether Bobby Wellington can act as engagement quality control reviewer in the future audits of Ordway Co. (6 marks)
A．The company is a sun-rising firm so it is worthwhile to extend the loan.
B．The company has some accounting problems, some improvement is needed.
C．The company is short of funds because it is sun-rising.
D．The company has some accounting problems because it is sun-rising.
A.Net income of $10,000.
B.Net income of $180,000.
C.Net loss of $10,000.
D.Net loss of $180,000.
NEW YORK (Variety)--Eight years after his death, prolific science-fiction author Isaac Asimov has suddenly arrived as a hot Hollywood commodity, with screen deals for his novels and short stories landing all over town. A deal dosed late last week at Warner Bros to adapt the Asimov short story "The Ugly Little Boy" into a film. The picture will be produced by Denise DiNovi and Demi Moore as a starting vehicle for Moore. In other recent deals, Fox has optioned Asimov’s most popular novel series, "Foundation," for Shekhar Kaput ("Elizabeth") to direct; Paramount is working on turning "End of Eternity" into a film that Ridley Scott ("Gladiator") will likely direct from a script. by "Total Recall" co-writer Gary Goldman; and Sony Pictures Family Entertainment is developing into an animated film series "Norby, the Mixed Up Robot," a series of 10 children’s novels that Asimov wrote with his wife Janet, who’ll act as creative consultant. Most of the deals will be worth seven-figure paydays if the films get made. Asimov wrote more than 460 works in either book or short-story form. While he wrote some nonfiction and mysteries, his speciality was sci-fi, with futuristic stories that were alien-free and high on pro-humanistic themes. His work has influenced many prominent sci-fi filmmakers, but Asimov action had been sparse. The most recent adaptation was the Robin Williams picture "Bicentennial Man." Part of the reason was that Asimov’s sole passion was his books and his family. He was hardly pushy(进取心的) about getting his works adapted, known to grant film options for as little as $50. The catalyst for the surge in screen activity is that Asimov’s estate is now represented by Crested By, a partnership created 1- 1/2 years ago by Vince Gerardis and Ralph Vicinanza, who currently handle the screen rights of about 200 major sci-fi, fantasy and horror authors.
1.Paragraph 3 mainly talks about____.
A、the agreements between Asimov’s wife and the Hollywood producers
B、the films that will be shot on Asimov’s works
C、the producers that will shoot the films
D、the works flint will be adapted into films
2.Who encouraged the gush(涌出) in filmmaking？____
A、A partner author of Asimov.
B、A company started by.
C、A corporation set up by Wince Gerardis and Ralph Vicinanza.
D、A firm managed by wife.
3.What’s Asimov’s attitude to the adaptation of his works into films？____
A、He was ardent about the adaptation.
B、He was indifferent to the adaptations.
C、He disagreed to the adaptations.
D、He was not interested in the adaptation at all.
4.Asimov mainly wrote____.
5.What is the article mainly about？____
A、Asimov and American show business.
B、Asimov and Hollywood filmmakers.
C、Asimov and his works.
D、The popularity of Ashuov’s works.
B.return on plan assets.
C.growth rate of salaries.