Assign 1 Essay

2816 Words May 13th, 2015 12 Pages
Before you begin the assignment for Module 1, please click the Module 1 assignment link in the online course navigation pane for instructions on how to complete and submit your responses for marking.
Part A: Multiple-choice questions
For multiple-choice questions, select the best answer. Answer each item by giving the number of your choice. Incorrect answers will be marked as zero. Please include your answers to the Part A multiple-choice questions with your answer to
Part B.
Question 1
(20 minutes)

Fine Fertilizers Limited (FFL) produces a line of lawn fertilizers that are manufactured under controlled conditions to ensure the ingredients are stored carefully and mixed in the correct quantities. FFL has
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MML has implemented free Internet in the lunchrooms and has noticed a decrease in the quality of production commencing shortly after the implementation. MML would like to start undisclosed monitoring of the employees' time spent on the Internet to ensure they are not exceeding their break time.
What is the most serious risk if the employees find out about the undisclosed monitoring?

Employees could continue to exceed their break time and ignore the undisclosed monitoring.
Employees could see this as an adversarial action and further decrease production quality.
Employees could take actions that would skew the results of the monitoring.
Employees could cease to use the free Internet in order to avoid monitoring.

PA1 Assignment 1

Page 1 of 5

d. Ultimate Company’s brand strategy is one of differentiation, offering high-quality products at higher prices than its competitors. Which of the following is the most appropriate financial measure to benchmark Ultimate
Company’s performance against its competition?

Debt-to-equity ratio
Total revenues
Net-profit-margin ratio
Gross margin percentage

As a member of the audit team for a large public corporation, you are concerned about violating independence due to familiarity. Under which of the following conditions could your audit team continue the audit without breach of independence due to familiarity?
1. The CFO extends an invitation for the audit

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