question 3

Question 1

There are many financial decisions that face companies today. One of which is how to secure additional monies in order to buy new equipment, construct a new building or improve a manufacturing plant. A means to obtain these funds is by the issuance of a bond. Being the head of your company, what rationale would you rely on to make a decision to issue such a debt instrument? How then would you measure the success of such a decision if you were asked to issue a report to the Board of Directors? Explain you reasoning.

Question 2

Assume you are working on a complex consolidation team assigned to apply the equity method of accounting. You have reached an impassable dispute with another team member working on this project relating to the proper way to apply the equity method of accounting.

Why is it important that the matter is resolved? How will this issue affect the financial statements?

Question 3

To prevent fraud by employees, companies must utilize internal controls and security. Many times smaller companies do not have the Resources to implement these and rely on the integrity of its employees. Do you feel that it is effective for a company to rely on the integrity of its employees? Why or why not? Can a company ensure the integrity of its employees? Explain.