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klio [65]
3 years ago
11

ABC Ltd (ABC) engaged the accounting firm of Ace & King to perform its annual audit. Ace amp; King performed the audit in a

competent, non-negligent manner and billed ABC for $30 000, the agreed fee. Shortly after delivery of the audited financial report, Sam Lloyd, the assistant controller, disappeared, taking with him $40 000 of ABCâ s funds. It was then discovered that Sam had been engaged in a highly sophisticated, novel defalcation scheme during the past year. He had previously embezzled $50 000 of ABCâ s funds. ABC has refused to pay the auditorâ s fee and is seeking to recover the $90 000 that was stolen by Sam. Which of the following is correct?
The auditor cannot recover the audit fee and is liable for $90 000.


The auditor is entitled to collect the audit fee and is not liable for $90 000.


ABC is entitled to recover the $40 000 defalcation of the current year and is not liable for the $30 000 fee.


ABC is entitled to rescind the audit contract and thus is not liable for the $30 000 fee, but it cannot recover damages.
Business
1 answer:
Debora [2.8K]3 years ago
8 0

Answer:

The auditor is entitled to collect the audit fee and is not liable for $90 000.

Explanation:

Ace & King did their job in a competent way, the fact that the company's controller was doing something illegal is not their responsibility. External auditors work with the information that is given to them and their job is limited to analyzing them and making their conclusions about them.

In this case, the controller was the person responsible for giving the information to the auditing company, so he had the chance to direct their conclusions. An external auditor is not responsible for what happens inside a firm, and if someone steals money or assets, he/she is responsible for it.

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The following data are for the Akron Division of Consolidated Rubber, Inc.: Sales $ 800,000 Net operating income $ 50,000 Averag
ELEN [110]

Answer:

ROI 87.5%

Explanation:

Return on Investment = return /investment

Total return

50,000 perating income + 20,000 residual income = 70,000 income

The asset could been adquire on lease or through liabilities, this is not investment. The investmetn made is the one done by the shareholders.

Stock Holders equity = investment = 80,000

The shareholders invest this amount to generate

70,000 dollars of return

ROI  70,000/80,000 = 87.5%

7 0
3 years ago
During a pandemic, goods and services may become scarce as a result of: A. Unwillingness to purchase goods and services due to f
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Answer: D. Restrictions on travel into and out of affected areas.

Explanation:

Restrictions on travel in and out of affected areas can lead to Scarcity in a Pandemic because there is no free movement of labour and capital.

With borders shut down, goods that were normally imported will suddenly become very hard to acquire because getting them through travel bans is very hard and in most cases, impossible.

Also affected are services as, for instance, the people who provided such services might live in or come from the place they provide said service to. Getting into those areas might prove too cumbersome a task thereby limiting Service provision.

Looking at the current Corona Virus Pandemic that has seen the most extensive Travel Restrictions by Countries in recent times and looking at the Scarcity being suffered by those same countries, drawing the conclusion that the Scarcity is as a result of an impediment to free movement of Goods and Services is most logical.

4 0
3 years ago
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A stock expects to pay a dividend of $5.49 per share next year. Dividends are expected to grow at 20 percent per year for the fo
navik [9.2K]

Answer:

The annual dividend expected to be paid by the stock nine years from today (D9) is $11.27 per share.

Explanation:

Note: See the attached excel file for the calculations of annual dividends expected to be paid the stock for Years 1 to 9.

In the attached excel file, the following formula is used:

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From the attached excel file, the annual dividend expected to be paid by the stock nine years from today (D9) is $11.27 per share (Note: see the bold red color under the Year's 9 Current Year Dividend).

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5 0
2 years ago
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic pric
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Answer:

Export

true

Explanation:

Because the price of meekers in meekertown is lower than the world price for meekers, meekers from meekertown are cheaper. so if free trade is allowed, other countries would want to purchase meekers from meekertown because it is cheaper.

So, meekertown would export meekers if free trade is allowed.

When a country is too small affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.

this is so because if the country is efficient in production of a good (producing at a lower price when compared to the world price), export of the good would increase thus increasing producer surplus. if on the other hand, the country is inefficient in producing a good and the country allows for free trade, the country can import the good. this would increase consumer surplus.

4 0
3 years ago
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The answer to your question is B.
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