The consequences of the Tyco scandal were profound. Shareholders incurred substantial financial losses as the stock price dropped, reducing billions in market value. Legal actions ensued, with CEO & CFO both convicted and sentenced to prison. Tyco itself faced regulatory penalties and settlements, while the scandal triggered significant reforms incorporate governance standards and reporting requirements. The case exemplifies the importance of transparency, full disclosure, and ethical conduct in accounting information. It also highlights the necessity of regulatory oversight, rigorous auditing practices, and a strong corporate culture emphasizing ethical behavior to prevent such accounting misconduct in the future. The Tyco International scandal serves as a reminder of the  critical  role  accountants play in protecting the  integrity of accounting  information and upholding investor trust.

Part B (25 marks)

Question 1

a)   Explain three inventory valuation methods                             (3 marks)

b)  Discuss the implications of choosing different inventory methods on financial statement. (6 marks)

c)  How are these methods used to manipulate net income without violating the accounting principles?               (4 marks)

Question 2

High receivable turnover days are one of the major causes of insolvency.  Cash flow planning involves making sure that a business generates enough cash to be able to payday-to-day expenses.

For example, many manufacturing businesses have a cash cycle. They buy raw materials and parts on credit and then manufacture goods, which they store as stock. They then sell these goods on credit to customers. In the meantime, they have overhead expenses and a workforce to pay. A problem for traders is that they expect credit customers to pay on time. This provides the cash to continue the credit cycle and to pay wages and other outstanding bills. Unfortunately, the cycle often  breaks  down  because  very  often  credit  customers  are  slow  to  pay.  This  leaves  the manufacturing businesses with a cash flow problem and increases its receivable turnover days.

a)   Based on the information above, recommend six different strategies that manufacturing businesses can implement to reduce its receivable turnover days and solve cash flow problems.                   (12 marks)

Part C (40 marks)

You are in the last semester of your studies. After the graduation, you are determined to join one of the best companies of Malaysia. Now you have decided to do financial analysis before you start sending your job applications.

Requirement:

Choose one industry, then select two companies of your choice. You are required to do financial statement analysis, which focuses on specific aspects of the financial performance and financial position of both (selected) companies. Your analysis should contain the following:

(a) Prepare the following ratio calculations based on the 2022 financial statements. (Note: you must submit the annual reports of 2022for chosen 2 companies. Only half marks will be given for this question if annual reports are not submitted).

1. Gross profit margin, 2. Net profit margin, 3. Days’ sales in inventory, 4. Current ratio, 5. Trade receivables collection period, 6. Trade payables payment period, 7. Debt to assets ratio, 8. Interest coverage, 9. Return on Assets, 10. Asset turnover ratio      (20 marks)

(b) Analyze, interpret and compare the financial statements of both companies.        (20 marks)

Please use the following format to present your calculations (You are required to state the formula used clearly):

General Expectations for Group Assignment

Where computations are relevant, you must show ALL calculations clearly. You should give some thought,

however, to the most effective way to present the material - you must provide clear, concise explanations.

Your assignment must be prepared in 1½ spacing on single sided pages with 3 cm left & right margins, and 2.5 cm top & bottom margins. Please use Times News Roman font (size 12). Only one assignment  should  be  submitted  on  behalf  of  the  group.  Please  ensure  that  the  assignment  is submitted together with the assignment cover sheet.

A word length is required to be placed on all assignments. Where explanations are necessary, just short and concise answers are sufficient. The group assignment should not exceed 2,800 words in length - this is inclusive of all headings and calculations. Penalties will be imposed on all assignments exceeding 2,800 words. Penalties will be applied for violating the word limit (10% deduction per 200 words over the limit). Please note that words contained in the assignment cover sheet and also reference list should not be included in the overall word count.

The word count must be printed on the assignment cover sheet. Markers cannot be expected to look for the word count elsewhere. 2 marks will be deducted if the word count is not on the assignment cover sheet. Students are expected to present a paper of professional quality. At the very least, check spelling and grammar. Ensure that all aspects of the requirements have been addressed.

Submission of Assignment

You are required to submit a soft copy of your assignment at Digital Drop box to your tutor before 2.00 pm on 18th December 2023 (Monday of Week 13). Assignments submitted via alternative modes will not be accepted.

Only one assignment should be submitted on behalf of the group. Please make sure that all student names (spelled correctly) appear on the assignment cover sheet.

Extensions

Extensions to the assignment due date will only be approved in exceptional cases and for reasons that could not have been foreseen at the commencement of the study period. All extension requests must be made by email to the module leader prior to the due date and time. In this regard, please note that:

•    Heavy workloads are not normally considered grounds for extensions as you are expected to plan your study period with the pre-set due dates in mind.

•    Extensions   will  only  be  granted  in  exceptional  and  unforeseen  circumstances  supported  by documentary evidence (medical certificate, or an employer’s letter of a crisis, or other third-party evidence) submitted before the due date, as noted earlier. Students requesting extensions within one week of the due date will be required to provide drafts of work-to-date in support of their application.

•    For all approved applications for extension, the maximum length of time allowable is five days from the original submission deadline.

Late submission of assignment without permission

Assignments submitted within 24 hours after the published deadline will be penalized as below:

a. A mark of more than 50% for the assessed piece of work will be reduced to 50%.

b. A mark of 50% or less will stand.

Assignments will not be accepted after the 24-hours window and will be recorded as anon- submission. A mark of ZERO will be awarded.

Non-Submission of Assignment

Students who do not submit their assignment will be deemed to have forfeited their right to a second attempt (re-sit) of the module. These students will be required to repeat the module with attendance and undertake all assessments again (as their third attempt (repeat)).

Note: Students are granted only four attempts at a module. If you do not pass the module in the fourth attempt, you will be excluded from the Dual Award programme.

Feedback and Mark for Group Assignment

The mark and feedback on the assignment will be provided on a Feedback Form. The purpose of the feedback is to help you to assess your ability to apply the knowledge and concepts taught in the module in sufficient depth, as well as your progress toward meeting the module objectives. The feedback and marks for the assignment will be given to you within four weeks of your submission of the assignment.

Assessment Offences

Taylor’s University treats any acts of dishonesty relating to assessment of University courses very seriously. It is vital that students acquaint themselves with the University’s policy on plagiarism (refer to TU-UWE Programme Guide 2020). Students are advised that the Harvard referencing styles should be consistently adopted for all pieces of assessment.

Assessment Offences is defined here as passing off the work of others as one’s own including copying (reproducing or imitating), cheating, collusion (agreement to deceive, using words or ideas of colleagues or other students and passing them off as your own), plagiarism and other breaches of assessment or other examination regulations. Cheating, collusion and plagiarism are the use of unfair means of presenting work for assessment or of aiding another student to do so.  Also preventing or attempting to prevent another student from being able to be assessed properly.

Allegations of and investigations into assessment offences will be dealt with in accordance with the regulations  and  procedures  in  force  at  Taylors  University  for  the  course.  Subject  to  any  specific requirements of external validating or professional bodies, where a student is found to have committed an assessment offence a decision must be taken either to take no further action or to impose an appropriate penalty which may include failing the student and determining whether or not the student will be permitted another assessment attempt.

Where it is decided that further action should betaken, one of the following penalties maybe imposed:

-           resubmission and reduce the mark for the relevant piece of assessment; or

-           to reduce the mark for the relevant piece of assessment; or

-           to reduce the mark awarded for the relevant piece of assessment to zero; or

-           that the student be deemed to have failed the module and to determine whether to permit any further attempts in accordance with the Academic Regulatory Framework.

Marking Criteria (to be inserted after the cover page of the assignment)