1) Global Business Network LLC, is a Oman based consultancy firm in Muscat. The company has the following cases related to the financial reporting; a) Omantel company showed an increase in earnings per Share (EPS) from OMR. 0.350 to OMR. 0.650 in 2019. However, the company forgot to disclose this information in its annual report.
1) Global Business Network LLC, is a Oman based consultancy firm in Muscat. The company has the following cases related to the financial reporting; a) Omantel company showed an increase in earnings per Share (EPS) from OMR. 0.350 to OMR. 0.650 in 2019. However, the company forgot to disclose this information in its annual report.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1) Global Business Network LLC, is a Oman based consultancy firm in Muscat. The company has the
following cases related to the financial reporting;
a) Omantel company showed an increase in earnings per Share (EPS) from OMR. 0.350 to OMR.
0.650 in 2019. However, the company forgot to disclose this information in its annual report.
b) Oman Flour Company provides its top managers with bonus on the basis of reported profit.
During 2018 the management showed a decline in the final profit. In order to continue paying
bonus the company attempt to adopt different accounting policies that resulted in higher profits.
c) In 2019, Zain Oil company was being sued for damages the seaside because its chemical
material dropped to the sea. The settlement of which could threaten the financial stability of the
company. The company decided to choose non-disclosure with the hope that its lawyer may win
the case at court.
d) In 2018 AXA Company faced serious liquidity problems. Management decided to window dress
the financial statements in a manner that improved the company's current ratios in order to hide
the liquidity problem of the situation. However, in 2019 the company came out of liquidity problem
and stopped window dressing practice.
You are required to identify and explain in brief the suitable qualitative characteristics of useful
financial information for each case.
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