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Share-Based Payment Reporting and Special Purpose Entities (SPE) Memo

As a member of the staff assigned to the audit of a publicly traded company, your senior has asked you to evaluate both share-based payment reporting and special purpose entities (SPE) reporting for the company.

Research share-based payment reporting and SPE reporting individually. Write an executive memo that includes a description of what you will look for to see if the client is consistent with the generally accepted accounting principles (GAAP). Pay particular attention to accounting treatment of share-based payment and accounting consolidation theory as it relates to special purpose entities.

Keep the memo as brief as possible while fully exploring the issues.

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Date: December 22, 2008
To: Senior
From: Staff members
Subject: Shared Based Payment Reporting and Special Purpose Entities (SPE) Reporting


This memo briefly explains the share based payment reporting and special purpose entities (SPE) reporting. It also discusses its impact on the company's financial statements. The effectiveness of an audit depends on reporting results, so that suitable actions may be taken to rectify irregularities. The reporting procedures are factual and the conclusions are left to be drawn by the user of the report. The brief description of the share based payment reporting and special purpose entities reporting are as follow:

Share-based payment reporting: The transactions related to the share based payment are defined as the proceedings in which any entities obtain or get the products or services by fulfilling the two vital conditions i.e. equity instruments of the entity or cash. In this transaction, the total sum is based on the entity's shares price (IFRS-2: Share-based Payment). The financial statement on accounting for the share-based payment will furnish the full or more reliable information to the stakeholders i.e. investors, lenders or other users of financial statements, so that they can take an appropriate decision on the basis of the information given and also realize the compensation cost referring to share-based payment dealings easily (FASB Issues Final Statement on Accounting for Share-Based Payment, 2004).

This reporting depicts that in the financial statements making out the actual cost related to the share-based payments amends the comparability, dependability, and relevancy of ...

Solution Summary

The response discusses share-basedpayment reporting and SPE reporting and their relative advantages, disadvantages and guidelines in 1013 Words with APA-style references.