F17 MGAB01 The Role that Has Been Assigned to the Accountant and the Users of the Report (Case Study Sample)
1. This assignment incorporates all lecture material up to and including Lecture 8.2. Your case response must be written in case format (i.e. issue identification, issue analysis/alternatives, issue recommendation) and must include a situational analysis (identifying and describing important company information, constraints, users, and the financial reporting needs of each user). Further information regarding this format is included in the specific instructions below.3. Make sure to plan the case response by making use of a case outline (detailing your answers to the questions in requirement #1). Note that your case outline should not be submitted as part of your assignment.4. All assignments are due on Blackboard and Turnitin (class ID and Enrolment passwords are found on page 4 of the course outline).5. Except for any unusual circumstances pre-approved by the instructor, no late group assignments will be accepted. Late assignments will be awarded a mark of zero.
The Role that Has Been Assigned to the Accountant and the Users of the Report
It is accountants who will be playing the role of a CFO in providing advice to the B&J Moving Limited concerning the appropriate accounting policies, the right internal control, and also the preparation of financial statement as well as reporting for the first fiscal year end. The information provided will be useful to the different users that might find the information useful for them. Some of the users that would require the information provided include the Owners, Royal Bank, Suppliers, Customers and the Future Investors (University of Toronto, 2017).
Users and Objectives
The report provided will enable the owners to ensure that there is continued success and growth of the B&J Moving Limited. The financial statement will enable the owners to understand the true financial and economic situation of the company so as to track performance; biasness to reflect the strong liquidity and also the solvency to indicate to the Royal Bank their ability to pay back any amount of loan. Brig and Jon who are the owners would wish to take the company to public in two years, to ensure that the company performed continuously well and also to show that there would proper return on investment. Although the owners of the business might be having proper knowledge about the business, but one thing for a fact is that they lack necessary accounting knowledge and even proper internal control; therefore they have over relied on the Accountant acting as the CFO to ensure that financial reporting procedures are adhered to (University of Toronto, 2017).
The Royal Bank
The bank would require the information so that they can assess the ability of the company to pay the bank loan and they are also in need of the report to enable them determine if the BJM Company is capable of complying with the bank covenants. The bank also needs the financial statement to be in prepared in accordance to with an appropriate standard to enable them to compare the performance of the company with other companies that are operating within the same industry. Other than the bank and the owners, who would find the information from the report quite useful; include the suppliers, customers, and even the future possible investors (University of Toronto, 2017).
B&J Moving Limited being private company, it has got the option to either adopt IFRS or ASPE. More often than not privately owned companies would adopt IFRS and also the company is planning to go public in the next two years time. The ratio of Debt to Equity ought not to be more than in form of 1 to 1 and the bank should also be provided with a proper audited financial statement (University of Toronto, 2017).
Case Response (Issue/Analysis/Recommendation)
Cash against Accrual Basis of Accounting
Cash and accrual basis are different two procedures applied in recording dealings of accounting. Major dissimilarity between these two procedures of accounting is about timing for recording these transactions. However, when aggregated over a certain period of time, then it would be discovered that these methods are approximately the same. When it comes to court basis, the revenue is recorded as and when the cash is received from customers, and the expenses incurred are recorded when cash is paid to suppliers and employees. On the other hand, when it comes to accrual basis, the income is recorded as and when it is earned and the operating costs is recorded as and at the time they are consumed. B&J Moving Limited is currently using the cash basis accounting method to record their revenue
- Case Study Airline Fuel Hedging at Southwest and LufthansaDescription: How does Lufthansa Airlines hedge fuel price risk? Does the hedging premium vary over time? Please explain. Please explain how the authors examine motives for airline hedging by using multivariate regressions. What do they find?...2 pages/≈550 words | 2 Sources | APA | Accounting, Finance, SPSS | Case Study |
- Dilemma of an AccountantDescription: Accountants always face dilemmas that not only conflict with their personal values, but also conflict with accounting principles...3 pages/≈825 words | 3 Sources | APA | Accounting, Finance, SPSS | Case Study |
- Intermediate AccountingDescription: Why is the point of sale usually used as the basis for the timing of revenue recognition? ...2 pages/≈550 words | No Sources | APA | Accounting, Finance, SPSS | Case Study |