Problem 1) According to the text, there still are differing opinions on what constitutes a company's liability and periodic expense for a pension plan.What part of the pension formula gives rise to this controversy? In your opinion, how should this expense be measured? Give an example using your measurement criteria.
Problem 2) In the current economy, pension plans have greatly suffered in value due to inflation and recession. How can companies compensated for this loss in value? How can individuals compensate for this loss in value? Give an example of how an individual can recoup a 25 - 30% loss on a pension portfolio that was estimated at $214,000 prior to the recent market decline.
Problem 3) The book gives much information concerning financial reporting requirements and ethical responsibilities. Although no precise definition can be given, in my opinion, exists for the word 'ethical'. In your opinion, what are ethics and how do they relate to financial reporting? What type of positive and negative implications, if any, exist in the absence of ethics? Can laws and regulations compensate for a lack of ethics in the business world?
Problem 4) The Foreign Corrupt Practices Act of 1977 lists several sanctions for offering bribes, kickbacks, etc. While this is the rule for accounting in the United States, other countries have no such laws. How does the International Accounting Standards Board (IASB) compensate for this inconsistency in accounting rules, if at all? How would you compensate for this difference in accounting standards? Do you believe that allowing bribes, kickbacks, etc. is necessarily unethical?