Tutorial Module 2 - TUTE Work PDF

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University of Technology Sydney 22016 Ethics and Governance Tutorial Submission Cover Page Student ID Full name Mark (out of 10) Comments

Important Notes

 Complete the cover page with your student ID and name on the cover page;  Please rename the WORD file with your student ID followed by your family name. For example, the original file name is “Tutorial Module 2 P1”, your ID is 2020123 and your surname is Ross. Please rename the WORD file as “Tutorial Module 2 P1_2020123_Ross”.  Please include your name and student ID in the email subject.  Please ensure you send me the file BEFORE the start of the seminar each week.  Please complete your homework with explanations in the submitted WORD file.

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University of Technology Sydney

22016 Ethics and Governance Tutorial 1 (Week 2)

Quick Check Question 1: Accounting standards in Australia are formulated by the: a. Australian Securities and Investments Commission (ASIC) b. Australian Accounting Standards Board (AASB) c. Institute of Chartered Accountants in Australia (ICAA) d. CPA Australia (CPAA) The board which develops and updated Accounting practices and regulations that companies must adhere too. 2. Which type of business organization is owned by its shareholders? a. Proprietorship (sole trader) b. Partnership c. Company d. All the above are owned by shareholders Company would have Publicly listed shares on the ASX giving shareholders partial ownership. 3. Who are the owners of a company? a. Directors b. Shareholders c. Managers d. None of the above Company ownership is based on proportion of shares owned by shareholders.

Ethical Issue Ethical issue 1 The board of directors of Mishusi Wholesale Grocery is meeting to discuss the past year’s results before releasing financial statements to the public. The discussion includes this exchange: Rebecca Su, CEO: ‘This hasn’t been a good year! Revenue is down and expenses are way up. If we are not careful, we will report a loss for the third year in a row. I can temporarily transfer some land that I own into the firm’s name and that will beef up our balance sheet. Grant, can you save $500,000 from expenses? Then we can probably get the bank load that we need.’ Grant Tsui, Chief Accountant: ‘Rebecca, you are asking too much. Accounting principles and standards are designed to keep this sort of thing from happening.’ Required 1. What is the fundamental ethical issue in this situation? 2

AASB Ethics: “Ethical reporting of a poor financial position may lead to the failure of an organization” 2. Discuss how Su’s proposals violate accounting principles. Identify each specific concept or principle involved. The Accounting Professional and Ethical Standards Board (APESB) Compiled APES 110 Code of Ethics for Professional Accountants (APESB 2017) Monetary Principle, Entity principle, Time period, Conservatism, Matching. Reporting less Expense- accounting numbers are not reliable

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