INTERNAL AUDIT & FINANCIAL CONTROL TAKE-HOME EXAMS Spring 2020 Page 1DEGREE: B.Sc. ACCOUNTING, AUDITING AND FINANCESEMESTER: EIGHT Student NameStudent NumberSemesterSpring 2020MARKS100Weightage50% Unit titleETHICS AND CONDUCT OF ACCOUNTINGPROFESSION UG034Exam Paper Issue Date14th May 2020Type of AssessmentTAKE-HOME EXAMSSubmission Deadline30th May 2020Assessor:Ms. Kumutha KrishnanInternal Verifier:Ms. Mariam Hassen College of Banking and Financial StudiesINTERNAL AUDIT & FINANCIAL CONTROL TAKE-HOME EXAMS Spring 2020 Page 2Instructions to candidates:1. This assessment is Take home exam which is a substitute of your Final exam. It is tobe completed Individually.2. This Assessment accounts for 50% of the total marks available for this Module.3. Answer All the Questions.4. You are expected to Show all your workings clearly wherever needed.5. Please start each answer on Fresh page.6. Plagiarism is a form of cheating in which students use the work of others and present itas their own. Do not Allow another student to copy your work and then submit it undertheir own name. The college considers this form of cheating as a serious offence.7. Please limit your discussions around the theoretical question to around 1500 2000words. This assessment is mostly based on theoretical questions.8. Please be aware that your work will be submitted through Turnitin. You must onlysubmit your own work including correct citations and references for any externalmaterials used in your work.Turnitin ID ___________ Password _______________________Note: It is important that you answer the question according to the definition of the verb.A list of verbs that appear in the question requirements for each question in this paper is asfollows VERBS USEDDEFINITIONDescribeCommunicate the key featuresExplainMake clear or intelligible/State the meaning or purpose ofAnalyseExamine in detail the structure ofDiscussExamine in detail by argumentEvaluateAppraise or assess the value ofRecommendPropose a course of action There are TWO SectionsSection A TWO (compulsory) questions to be attempted 60 marks weightageSection B- One question (compulsory) 40 marks weightageINTERNAL AUDIT & FINANCIAL CONTROL TAKE-HOME EXAMS Spring 2020 Page 3Section A Two compulsory questionsQuestion 01Warren Buffet, one of the business tycoons in present era said, Managers that always promiseto make the numbers will at some point be tempted to make up the numbers. The statementemphasis of having ethical persons as head of companies. If the CEO and strategic levelmanagement who practices fraud, they can twist earnings to make them look better than theyreally are, thereby deceiving the users of the financial statement.a) Discuss the motive for earnings management with suitable examples(20 marks)(Maximum word count 400 words)b) Evaluate earnings management from the utilitarian perspective. Can earningsmanagement be an ethical practice? Explain why or why not.(10 marks)(Maximum word count 200 words)Question 02Assume you are facing an interview at an audit firm. A member of the interview panel askedyou to justify the link between, moral intensity, ethical leadership, and organizational cultureand how it will impact on the accounting firm?Craft a response that you feel comfortable by describing the characteristics of ethicalleaders, the role of moral intensity in developing ethical organisations and evaluating theimportance of ethical leadership in accounting firms with suitable examples.30 marks(Word limit 600 words)INTERNAL AUDIT & FINANCIAL CONTROL TAKE-HOME EXAMS Spring 2020 Page 4Section BMariam CPA is the accountant of a public listed company. She just completed meeting withSalman, who is the Chief Financial Officer (CFO) of the company. Salman tried to convinceMariam to go along with proposal to combine the revenue expenditures (15 various revenueexpenditures such as repair of motor vehicle, fuel expenditure etc.) related to vehiclemaintenance into one amount (OMR 40,000). Mariam knows that OMR 40,000 is a materialamount to earnings and rules in accounting require the expenses related to day to dayoperations for a specific period should be linked to revenue generated for the same period.Which will yield the most accurate income statement result. Therefore, Mariam asked time tothink about this matter.However, at the end of the meeting Salman stated, Mariam, you can get back to me tomorrowon how you are going to work it out. But keep in mind that you should act upon the request ofmanagement. Therefore, I really want you to act in favour of my proposal to capitalize therevenue expenditure to boost the earnings and meet the earnings expectation of financialanalyst. This statement shows that Maryam is under great deal of pressure to fulfill therequirement of Salman. Further Salman informed that adjustment on accounting entries willhelp to provide for a bonus to management including herself.Assume you are in Mariams positionCritically evaluate the given scenario and provide the possible course of action thatshould be taken to resolve the ethical dilemma.Note: your answer must include the key fundamental ethical principles for accountants that are more relevant for the givenscenario threats to independent faced my Mariam ethical issue faced by Mariam in the given scenario the stakeholders who will affected due to the given practices and who are the peopleMariam can get connected to resolve the ethical issue. the possible course of action that should be taken to resolve the ethical issue(Total 40 marks)(Maximum word count 800 words)END OF EXAM PAPER
B.Sc. ACCOUNTING, AUDITING AND FINANCE
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