ESTIMATING THE RISK PREMIUM USING HISTORICAL DATA: A CASE OF THE NSE Introduction This study seeks to estimate the risk premium of a company using historical data. Analysts use historical data to estimate the risk premium of a company’s equity. This is because the historical data is readily available from the company’s financial statements and the securities exchanges for example the Nairobi Stock Exchange (NSE) in Kenya. Historical market data can be used to compute average returns and a measure
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The Accounting Review 77‚ 435–453. Krishnan‚ J.‚ 2005. Audit committee quality and internal control: an empirical analysis. The Accounting Review 80‚ 649–675. Krishnan‚ G.V.‚ Visvanathan‚ G.‚ 2009. Do auditors price audit committee ’s expertise? The case of accounting v.s. non-accounting financial experts Krishnan‚ J.‚ Wen‚ Y.‚ Zhao‚ W.‚ 2011. Legal expertise on corporate audit committees and financial reporting quality. The Accounting Review 86‚ 2099–2130. La Porta‚ R.‚ Lopez-de-Silanes‚ F.‚ Shleifer
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Financial accountants and independent auditors commonly face challenges Abstract Financial accountants and independent auditors commonly face challenging technical and ethical dilemmas while carrying out their professional responsibilities. This case profiles an accounting and financial reporting fraud orchestrated by the chief financial officer (CFO) of a major public company and his subordinates. The CFO‚ who was a CPA‚ took extreme measures to conceal the fraud from his company’s audit committee
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1. Is Eye Vision’s arrangement with Holland Hospital within the scope of ASC 985-605‚ Software: Revenue Recognition? In this case‚ the main content of the Eye Vision’s arrangement with Holland Hospital include embedded software medical equipment and an initial option to purchase a two-year separately priced maintenance agreement. In this case‚ because“Eye Vision has never sold‚ nor does it offer to sell‚ the Clear View Laser without the embedded software because the software is necessary to perform
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The North Face‚ Inc. - Individual Case Synopsis: The North Face‚ a company that has always found a way to sell their product to unique customer‚ didn’t get to where they are today easily. Presently owned by Vanity Fair‚ The North Face was started by Hap Klopp in the mid 1960s with the mission of providing a ready source of hiking and camping gear to customers. Today‚ they offer products ranging from outdoor chairs to backpacks. As the company began to grow‚ so did the goals set by management
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Eye Vision Case 10-11 Eye Vision Inc‚ a long-standing medical device manufacturer‚ has signed a contract to sell Holland Hospital the Clear View Laser and a two-year separately priced maintenance plan for $1 million and $0.2 million respectively. On a when-and-if available bais‚ Eye Vision Inc. will provide software updats that is embedded with the Laser to maintainance purchasor. The software has never been sold without Laser for its functional necessity. In this memo‚ as explained below‚ we conclude
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Case 14-3 Coconut Telegraph Background on Coconut Telegraph Coconut Telegraph Corporation (Coconut) is a developer and provider of specialized customer billings and management software and systems. On February 1‚ 2012‚ Coconut had an arrangement with Buffet Worldwide Inc. (Buffet) to deliver the Volcano System and provide one year of post contract customer support (PCS). The PCS will start March 1‚ 2012. At the time of the arrangement‚ February 1‚ 2012‚ Buffet paid $12‚000 for the Volcano System
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CASES Real World Case 5-1 Requirement 1 A bill and hold strategy accelerates the recognition of revenue. In this case‚ sales that would normally have occurred in 1998 were recorded in 1997. Assuming a positive gross profit on these sales‚ earnings in 1997 is inflated. Requirement 2 A customer would probably not be expected to pay for goods purchased using this bill and hold strategy until the goods were actually received. Receivables would therefore increase. Requirement 3 Sales that would
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Methods of Revenue Recognition 1. The Accrual Method of Revenue Recognition The most common revenue recognition system is based on the accrual method. Under this approach‚ if the revenue recognition rules presented in the last section have been met‚ then revenue may be recognized in full. In addition‚ expenses related to that revenue‚ even if supplier invoices have not yet been received should be recognized and matched against the revenue. The name of this method does not imply that the revenue
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#1-E) Experience with Revenue Recognition--- Do you have any experience related to revenue recognition? Surely‚ I do #2-Please read the financial statement analysis case (Merck & Johnson & Johnson) on page 613‚ Chapter 12. Please read the instructions for (a)‚ (b)‚ and (c) and address the three questions that are asked. Case Merck & Johnson & Johnson are two leaders producers of health care products. Each has considerable assets‚ and each expends considerable funds each year toward the development
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