Callmate Telips - Choice of Accounting Policy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Callmate was the innovator in the pay phones and prepaid calling card industries in Pakistan and had significant chance to grow into a leading business thing. The events in the case illustrate that competitive share price direction, as well as the company strategy, could not be safe if there were no checks on the directors. All the directors of Callmate were close family members and the audit committee consisted of three of the directors. Ferguson was seen among the top professional accounting firms in Pakistan. As Callmate was listed on the Karachi Stock Exchange, it was required to print its financials after Ferguson had reviewed these.

The company had acknowledged permission through early 1995 to enter into the long distance international marketplace, which was previously the monopoly of the state business Pakistan Telecommunication Corporation Limited (PTCL). A disagreement arose between the company and the auditors on the accounting policy associated with revenue recognition used in the financials of the half year ended December 2005. This dispute and the business attempting to manage its share price led to several issues that became public knowledge as the business tried to malign the auditors. Corporate governance is examined by the case by examining the regulator of public listed companies, the actions of the board of directors and the role of the external auditor. There were a string of events that caused a company that is money-making to rapidly become a pariah on the stock exchange and be frozen from the exchange.

PUBLICATION DATE: December 11, 2008 PRODUCT #: 908N28-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING