Callmate Telips (A) – Choice of Accounting Policy Harvard Case Solution & Analysis

The government of Pakistan, in order to execute its economic deregulation plan, undid its regulatory controls on the telecommunications industry. Callmate Telips Telecom Limited (Callmate) was a member of telecommunications industry in Pakistan at that time. Callmate was the leader in the payphones and prepaid calling card industries in Pakistan. The events in the case attest the company strategy, in addition to competitive share price direction, were able to pose a serious danger in a predicament where no checks were made on the company’s directors. The managers at Callmate were close relatives of one another and the audit committee consisted of three of the directors. The outside audit firm, which audited Callmate, is an  associate of Price Waterhouse Coopers International.

Callmate was one of the many companies Karachi Stock Exchange, this made it obligatory for it to publish the organization’s financials on a quarterly basis, after Ferguson had reviewed these. Eventually, the discourse between the business and the auditors erupted with a disagreement on the semantics of the accounting policy that is concerned with the recognition of revenue, Emergence of this dispute alongside Callmate’s efforts to handle its share price, caused several problems that became public knowledge as the firm tried to malign the auditors. Corporate governance is examined by the case by analyzing the role of the external auditor, the actions of the board of directors and the regulator of publicly listed firms.

Publication Date: 12/15/2008

This is just an excerpt. This case is about Finance

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