Reference no: EM133378960

Question
A. Considering the regulatory changes introduced in the last decade, do you believe that the principles-based approach to accounting standards is superior to the rules-based approach? If so, how can we ensure that these principles are implemented consistently across different industries and jurisdictions, given the complexity of modern business operations and the varying economic, legal, and cultural contexts??

B. In light of the increasing importance of sustainability reporting and the growing interest in environmental, social, and governance (ESG) factors, how can we reconcile the need for reliable and comparable financial information with the demand for non-financial indicators that capture the impact of companies' activities on the environment, society, and governance systems? What role should accounting play in promoting sustainability and accountability, and how can we measure the effectiveness of these efforts?

C. Given the prevalence of financial fraud and the challenges of detecting and preventing it, what strategies and technologies can be used to improve the effectiveness of audit procedures and enhance the quality of financial reporting? How can we balance the costs and benefits of more rigorous auditing and internal control systems, and what are the ethical implications of these decisions for accounting professionals and their clients?

D. In the context of the ongoing debate over the future of the accounting profession and the impact of technological innovations such as artificial intelligence and blockchain, what skills and competencies will be most critical for accountants in the coming years, and how can they be developed and assessed? How can we ensure that the human factor remains central to the accounting process, even as machines become more sophisticated and capable of performing routine tasks?

E. With the rise of multinational corporations and the increasing complexity of international trade, how can accounting standards and practices be harmonized across different jurisdictions and cultural contexts? What challenges and opportunities arise from cross-border transactions, and how can they be addressed by accounting professionals and policymakers? How can we balance the need for global consistency with the need for local relevance and diversity in accounting practices?

F. With the increasing importance of intangible assets such as intellectual property, brand value, and human capital, how can accounting standards and practices adapt to reflect the changing nature of modern businesses? What challenges and opportunities does this pose for accounting professionals and policymakers, and what are the ethical considerations involved in valuing and disclosing these assets?

G. In the wake of recent corporate scandals and public distrust of large corporations, how can accounting professionals promote transparency and accountability in financial reporting? What role should auditors, regulators, and standard-setters play in ensuring that companies adhere to ethical standards and best practices, and how can we measure the effectiveness of these efforts?

H. With the increasing use of big data analytics and other advanced technologies in accounting, how can accounting professionals ensure the accuracy and reliability of financial information in the face of rapidly changing data sources and algorithms? What ethical considerations arise from the use of these technologies, and how can they be addressed by accounting professionals and policymakers?

I. A lease agreement that calls for annual lease payments of $26,269 over a six-year term and qualifies as a finance/sales-type lease was signed by a lessor and a lessee. Additionally, the asset's expected useful life is six years. The lease begins on January 1st, when the first payment is due. The rate of interest is 5%. The present value of the lease payments, which is equivalent to the lessor's value of the asset, has been calculated to be $140,000 based on these facts.

Required:

[1] Prepare the necessary journal entries for the lessor and lessee to sign at lease signing.

[2] Prepare the necessary journal entries for both the lessee and the lessor prior to the first lease payment, which is on January 1st.

[3] Prepare the journal entries required at the second lease payment (December 31) for both the lessor and the lessee.

[4] Prepare the entry necessary to "depreciate" the right-of-use asset solely for the lessee (hint: A finance lease's amortization is known as depreciation.

[5] Why is it not required that the lessor depreciate the asset?