In 2011, the Uniform CPA Examination will be offered outside the 55 U.S. jurisdictions for the first time in its history. The American Institute of Certified Public Accountants (AICPA), National Association of State Boards of Accountancy (NASBA), and Prometric â€“ the three organizations that jointly offer the CPA exam in the United States â€“ reached an agreement to administer the exam in international locations. The CPA exam will be offered next year in Japan, Bahrain, Kuwait, Lebanon, and the United Arab Emirates.
Questions: 1. Will the exam be offered in several different languages?Â Do you agree or disagree with this and why?
2. What are the â€œthree Eâ€™sâ€ of the licensure for the CPA designation in the U.S.?
3. What is the testing time for all 4 sections of the exam?
4. How many times has the computer-based CPA exam been offered?
Jane Buchan is a rarity on Wall Street. Not only has she built a hugely successful hedge fund investment firm but the firm is also the only one that is, on paper, owned and run by women. Unfortunately, it now appears that the firm Pacific Alternative Asset Management Company (PAAMCO) was bankrolled by some of the biggest (male) names in the business, in order to disguise aspects of the business from customers, partners and federal regulators.
1. What is this scandal all about in terms of ill-gotten gains? (Include some red flags of fraud and/or motives to commit this type of fraud.)
2. The case centers on whether Mr. Sussman had the right to convert a $2 million loan he made to Paamcoâ€™s founding partners in 2000 into an equity stake in Paamcoâ€™s parent company. What journal entry would Mr. Sussman make for this transaction, if credible?
3. What was Mr. Sussmanâ€™s previous history with the SEC and why is this important?
According to Joshua Bamfield, author of the 2010 Global Retail Theft Barometer report from the U.K.-based Center for Retail Research, U.S. retailers lost about $40 billion in stolen goods in 2010. Â This is about 1.5% of the nationâ€™s sales. Even though this sounds really bad, the losses are down by 6.8% from the prior year. Still, losses passed onto consumers added about $423 to the average American family’sshopping bill this year.
1.Â What are the most stolen goods?Â Explain why you think these are targeted.
2.Â Why do you think that employee thefts are greater than shoplifting thefts in the U.S.?
3.Â According to the video, while employers have increased their prevention efforts by 12%, why doesnâ€™t that result in a 12% reduction in losses?
4. What roles do accountants play in the prevention of retail theft? Explain.
Video. (2010) U.S. Families Lose $400 to Theft, October 19.
Former Denver Broncos quarterback John Elway and his business partner gave $15 million to a hedge-fund manager now accused of running a Ponzi scheme.Â In court papers filed by Elway and Mitch Pierce the two claim that their investment was supposed to be kept in a separate account from Mueller’s Over Under Fund. Therefore, the Denver Broncos legend is seeking a declaratory judgment for the return of their money, ahead of other investors. Mueller Capital Management has just $9.5 million left to cover liabilities of $140 million.
1.Â What is a hedge fund?
2.Â What accounting guidance for hedge accounting is available under International Financial Reporting Standards (IFRS)?
3.Â Â What accounting guidance for hedge accounting is available from the Financial Accounting Standards Board (FASB)?
4.Â As one accountant said of this story: â€œIt’s hard to feel sorry for rich people who play in games without rules (hedge funds).â€ Do you agree or disagree? Explain.
Federal regulators on Thursday, October 7, Â brought securities fraud charges against more than a dozen penny-stock promoters â€” including Larry Wilcox, who played California Highway Patrol officer Jonathan “Jon” Baker on the hit TV show “CHiPs” in the late 1970s and early ’80s. The Securities and Exchange Commission said it caught the promoters in “various illicit kickback schemes to manipulate the volume and price of microcap stocks and illegally generate stock sales.”
1.Â What is another name for the type of scam that Larry is accused of perpetrating?
2. Briefly summarize the kickback scheme and tell why it is illegal.
3. What type of charges does Larry potentially face?
Bank of America, the nationâ€™s largest bank by assets, is placing a moratorium on all foreclosure proceedings and sales across the United States, according CNBC and a report on The Wall Street Journalâ€™s Web site. The postponement takes effect Saturday, October 9. JPMorgan and Ally’s GMAC Mortgage unit have delayed foreclosures in 23 states where courts have jurisdiction over home seizures.
1. What is a â€œhydra?â€ Why does Dr. Henning say that the foreclosure mess is going to â€œbecome a hydra?â€ What ethical breaches are part of this story?
2. What is a defective title? Who will be sued for this and why?Â What are the potential avenues of liability in this crisis?
3. The article mentions civil suits. Do you think there will be criminal court actions also? Is this fraud?
4. How do you think this story came to the mediaâ€™s attention?
MGM Bankruptcy news is still coming in, but at the moment we know that Metro-Goldwyn-Mayer Inc. said it has begun seeking its creditors’ approval on a prepackaged bankruptcy plan in which they will exchange more than $4 billion in debt for equity in a new company that has rights to the James Bond franchise and the upcoming two-part movie series “The Hobbit.” Creditors would hold 95.3 percent of the company after it exits from Chapter 11. Only approved holders of secured debt as of Oct. 4 will be allowed to vote.
1. Why do you think that MGM chose bankruptcy over a sale?
2. What is secured debt?
3. According to the video, what were the strategic reasons that MGM has deteriorated over the years? What are some of the risks it has faced?
Why canâ€™t everyone accept credit cards? Now there is no good reason because the Square Up system eliminates card reading equipment by providing cell phone users with an app that snaps into a headphone jack. The plug is free and you are spared the contracts, the minimums and the monthly fees. For each transaction, Square charges you 2.75 percent of the total, plus 15 cents. Alternatively, you can accept credit card payments without the card itself â€” over the phone, for example. You just need the card number, expiration date and security code, although these transactions cost you more (3.5 percent).
1. Assume that you sold a surfboard on Craigs List to someone who paid you $100 and gave you a credit card. If you swipe the card, how much would you pay to Square for the use of their system?
2. Assume the same facts as in Question 1, except that you do not have the card to swipe, but enter the number, expiration date and security code. How much would you pay for Square to process the transaction?
3. Assume that you sold the surfboard from your small business. What journal entry would you make in Questions 1 & 2?
4. Why do you think that Square has restrictions on deposits over $1,000 for first time users?
According to the Wall Street Journal, McDonald’s Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.Â However, less than an hour after that release, ABC News Â and Reuters reported thatÂ McDonald’s and the Obama administration said the claims of the Â Wall Street Journal are false, regarding the dropping of its “mini-med” health insurance for hourly workers because of the new health care reform law.
1.Â Why do you think the stories are so different and why do you think there was such a quick response from McDonalds and the Obama administration?
2.Â What is the medical loss ratio in the new legislation?
3. What effects do you think the new legislation will have on the financial statements of companies?
4.Â What do you see as the costs and the benefits of this new legislation?
Fabrice Tourre, a controversial personality in the Goldman Sachs Group Inc transaction of 2007, asked a judge to throw out a U.S. regulator’s fraud lawsuit against him.Â About two and a half months ago, the bank settled its part of the case for $550 million.
In his filing, Tourre asked that the U.S. Securities and Exchange Commission case be dismissed because the 2007 “Abacus” transaction, which involved collateralized debt obligations (CDOs) tied to subprime mortgages, took place outside the United States.
1. What are collateralized debt obligations?
2. Where would CDOs appear in the financial statements of the bank that bought them?
3. Do you think he will prevail in his dismissal of the charges?
4.Â How do you think the Goldman Sachs Group reported the $550 million settlement in its financial records? Â