Case ID: 9B08N028
Solution ID: 19341

Callmate Telips A Choice of Accounting Policy Case Solution

Case Solution

Callmate Telips Telecom Limited (Callmate) was at the telecommunications business, a business where the regulating controls were progressively being un-tied through the government of Pakistan included in a fiscal deregulation program. Callmate was the pioneer within the payphones and prepaid phone card industries in Pakistan. The occasions within the case show the organization strategy, in addition to aggressive share cost management, might be harmful if there have been no inspections around the company directors. All of the company directors of Callmate were close family people and also the audit committee comprised of three from the company directors. The exterior audit firm that audited Callmate would be a.Y. Ferguson & Co. (Ferguson), a joint venture partner of Cost Waterhouse Coopers Worldwide. As Callmate was on the Karachi Stock Market, it had been needed to write its financials quarterly after these have been examined by Ferguson. The organization had received permission throughout early 1995 to initiate the lengthy distance worldwide market. A quarrel came about between your auditors and the organization around the accounting policy associated with revenue recognition. This dispute, together with the organization attempting to manage its share cost, brought to numerous issues that grew to become public understanding as the organization attempted to malign the auditors. The case examines corporate governance by analyzing the function from the exterior auditor, the conduct from the board of company directors and also the regulator of openly listed companies.

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