Question

The Ministry of Magic, the regulator of businesses, is concerned about the public financial reporting that was produced by Eeylops Owl Emporium Ltd. The Ministry was aware that the emporium had not indicated that it was discontinuing a division of its business and that for the last financial year it had not included an acquisition of a new building in its balance sheet, which it had purchased some three months before the end of the financial year.

Explain why the regulator is concerned with such oversights and what the emporium is required to do in each case.

Answer 1

Hello Buddy,

Coming to your question,

1) The regulator is bound to be concerned with such misreporting of assets and improper disclosures because such actions have a direct impact on all the stake holders concerned with the reporting company. The government is affecteed due to the taxes, employees for their rights, creditors and banks for security of their money, etc.

2) The emporium is definitely required to reinstate its financials with adequate disclosure with respect to the discontinued operations and also account for the fresh purchases regarding the acquisition of the new building.

I hope the above solution is what you were looking for. For any further queries or doubts in the solution, please feel free to drop a comment. Please do leave a positive feedback, Thank you :)