Reference no: EM132666645

Question -

1. On July 30, 2020 Mine Co Limited reported a merger with Rio Mine which has net assets of over 3 billion dollars.

The financial reports are due to be signed on August 2, 2020.

i) Discuss whether an adjustment in the financial accounts is required or a note disclosure, give reason for your answer.

ii) Discuss the effect the scenario has on the accounts and how they are presented.

2. On July 30, 2019, the company discovered that an employee was engaged in fraudulent activity and had defrauded payroll of over $3 million dollars over the last 2 years. The financial reports are due to be signed off by the directors and auditor at the end of August 2019.

i) Discuss whether an adjustment in the financial accounts is required or a note disclosure, give reason for your answer.

ii) Discuss the effect the scenario has on the accounts and how they are presented.