SCHOOL OF GRADUATE STUDIES

COURSE: ACCOUNTING AND FINANCIAL SYSTEMS

COURSE CODE: MCPC 618
GROUP 1
GROUP ASSIGNMENT
Instructions:
You are to answer all questions and submit in pdf to salomey.addo@upsamail.edu.gh not later than
5th April, 2024, and a hard copy on 6th April, 2024. Kindly provide a coverpage detailing the names
and index numbers of the group participants.
Question 1
Mr. Nyohnyoh has been appointed as a new Accountant of CPI Ltd, a manufacturing company
producing bottles of water on a wholesale and retail basis. As part of the company’s policy,
financial statements are to be submitted and presented to the Board of Directors by 31st January
the following year. The 2022 financial statements were prepared and presented to the Board on
31st March, 2023.
CPI LIMITED
Statement of Profit or Loss and Other Comprehensive Income 2022

Revenue 50,000
Cost of sales 1 (16,000)
Gross profit 34,000
Administrative expenses 2 (16,598)
Distribution costs (8,000)
Operating profit 9,402
Other incomes 3 5,500
Profit before Interest and Tax 14,902
Finance Cost (800)
Profit before Tax 14,102
Income tax expense (2,500)
Profit after tax 11,602
Other Comprehensive Income
 Revaluation gain 4,000
Total Comprehensive Income 20,602

Statement of Financial Position 2022

ASSETS
Non-Current Assets
Property, Plant and Equipment (WK4) 78,200
Investment property 15,000
Inventories 12,000
Current Assets:

Trade Receivables 12,152

Cash and cash equivalents 8,100
125,452

EQUITY AND LIABILITIES

Equity:
Stated capital 60,000
Revaluation Reserve 12,102
Retained profit 12,000
84,102
Non-Current Liability:
10% Redeemable Preference shares 9,000
10% Loan Note 8,000

Current Liabilities:
Trade payables 20,000
Advance investment income 500
Loan interest accrued 400
Pref. dividend accrued 450
Income tax accrued 3,000
125,452

Notes to the Financial Statements

Administrative expenses
Amount per trial bal 15,550
Bad debt (2%*12,400) 248
Depreciation 800
16,598
As the Financial Controller of the Company, you are to review the financial statements and provide
recommendations for improvement to the financial stements.
Required:
a. Discuss, with evidence, the extent to which the financial statements presented reflect the
qualitative characteristics of general-purpose financial statements under Chapter 3 of
Conceptual Framework of Financial Reporting. (5 marks)
b. Under no more than five headings (categories), discuss the shortcomings you have
observed in the financial statements presented, if any. (2.5 marks)
c. Provide recommendations for improvement based on your reviews. (2.5 marks)

Question 2
a. You are an Assistant Internal Audit Officer of ABC Group of Companies, and you have
carried out an internal audit of some sensitive operations of the entity. The audit covers
allowances and bonuses paid or due for payment to the Board Chairman and other members
of the board of governors, including the Chief Executive Officer. The transactions and
events smear profligacy and corruption, given the current financial difficulties that the
entity faces. You took a snapshot of the audit evidence with your phone cameras and posted
it on your old-school WhatsApp platform to buttress a claim of corruption you have made.
This has attracted a lot of traffic to your post and one of the group members, who is a
Journalist decided to spark a bigger debate on the matter in mainstream media. Your post
became viral within 24 hours. (5 marks)

b. A Director of Finance of one of the subsidiary company has been at post for the last two
years, and it has become an open secret in the entity that he does not know his job. Auditors
always raised many audit observations indicting the entity for bad accounting. The
financial records were in shamble, the financial statements were in disarray and the cash
management was unfortunate. In fact, he secured the job based on his relationship with the
owners rather than accounting professionalism. (5 marks)

Required:
Discuss, for each of the scenarios (a) and (b), one ethical code of professional accountants
that has been breached and suggest a safeguard for each of them.