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In the audit of financial statements, auditors consider the regulatory requirements. These cover professional standards promulgated by the International Federation of Accountants (IFAC) in the form of International Standards on Auditing (ISAs), International Standards on Quality Control (ISQC) as well as the International Ethics Standards Board for Accountants (IESBA). The other consideration involves legal requirements.
Required:
Identify THREE (3) regulatory authorities in Ghana whose requirements may be taken into account in the conduct of an audit and discuss their roles. (10 marks)
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a. The Securities and Exchange Commission and the National Insurance Commission are part of a list of regulators established by an Act of Parliament. They play a very critical role in the regulation of the financial services sector in the country.
Required:
i) Explain THREE (3) main functions played by the Securities and Exchange Commission in Ghana. (6 marks)
ii) Explain TWO (2) functions performed by the National Insurance Commission in Ghana. (4 marks)
b) LIGRI Bank Ghana Ltd generates a profit after tax of 15% on shareholders’ funds. The current capital structure of the bank is as follows:
| Item | GH¢ |
|---|---|
| Ordinary shares | 40,000,000 |
| Reserves | 80,000,000 |
| Total | 120,000,000 |
The management, with the board’s approval, wishes to raise GH¢50,000,000 from a rights issue to expand their existing operations in the country. The return on shareholders’ funds will not change. The current ex-dividend market price is GH¢4 per share. The right issue price proposed by the Finance Director is GH¢3.8 per share.
Required:
i) Calculate the total number of shares to be issued by the company. (3 marks)
ii) Determine the theoretical ex-right price per share after the issue. (3 marks)
iii) Calculate the new earnings per share after the rights issue. (3 marks)
iv) Comment on the calculations of the theoretical ex-right price calculated in ii) above. (1 mark)
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The financial sector is one of the most highly regulated sectors of any country. Notably, each industry under the financial sector has a special regulatory framework consisting of statutes to shape the conduct of participants in the industry and a regulator to foresee compliance and promote fairness and efficiency.
Required: i) Describe THREE (3) functions the Securities and Exchange Commission of Ghana (SEC) is expected to perform towards achieving fairness and efficiency in the securities industry. (6 marks)
ii) Explain TWO (2) implications of the regulatory functions of the SEC for corporate investing and financing activities. (4 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
In the audit of financial statements, auditors consider the regulatory requirements. These cover professional standards promulgated by the International Federation of Accountants (IFAC) in the form of International Standards on Auditing (ISAs), International Standards on Quality Control (ISQC) as well as the International Ethics Standards Board for Accountants (IESBA). The other consideration involves legal requirements.
Required:
Identify THREE (3) regulatory authorities in Ghana whose requirements may be taken into account in the conduct of an audit and discuss their roles. (10 marks)
Find Related Questions by Tags, levels, etc.
a. The Securities and Exchange Commission and the National Insurance Commission are part of a list of regulators established by an Act of Parliament. They play a very critical role in the regulation of the financial services sector in the country.
Required:
i) Explain THREE (3) main functions played by the Securities and Exchange Commission in Ghana. (6 marks)
ii) Explain TWO (2) functions performed by the National Insurance Commission in Ghana. (4 marks)
b) LIGRI Bank Ghana Ltd generates a profit after tax of 15% on shareholders’ funds. The current capital structure of the bank is as follows:
| Item | GH¢ |
|---|---|
| Ordinary shares | 40,000,000 |
| Reserves | 80,000,000 |
| Total | 120,000,000 |
The management, with the board’s approval, wishes to raise GH¢50,000,000 from a rights issue to expand their existing operations in the country. The return on shareholders’ funds will not change. The current ex-dividend market price is GH¢4 per share. The right issue price proposed by the Finance Director is GH¢3.8 per share.
Required:
i) Calculate the total number of shares to be issued by the company. (3 marks)
ii) Determine the theoretical ex-right price per share after the issue. (3 marks)
iii) Calculate the new earnings per share after the rights issue. (3 marks)
iv) Comment on the calculations of the theoretical ex-right price calculated in ii) above. (1 mark)
Find Related Questions by Tags, levels, etc.
The financial sector is one of the most highly regulated sectors of any country. Notably, each industry under the financial sector has a special regulatory framework consisting of statutes to shape the conduct of participants in the industry and a regulator to foresee compliance and promote fairness and efficiency.
Required: i) Describe THREE (3) functions the Securities and Exchange Commission of Ghana (SEC) is expected to perform towards achieving fairness and efficiency in the securities industry. (6 marks)
ii) Explain TWO (2) implications of the regulatory functions of the SEC for corporate investing and financing activities. (4 marks)
Find Related Questions by Tags, levels, etc.
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