Premium Essay

Case 3

In: Business and Management

Submitted By spunkush
Words 385
Pages 2
1) (a) Professional Skepticism is when a professional has a questioning mind, a person who does not dismiss irregularities, but aims to find more and have an informed and unbiased opinion on a subject. It helps reduce the chance of error and fraud.
(b) When Will first recognizes one of the cash transactions was never deposited in the bank, he recognized that it was an immaterial difference and that he didn’t need to look into such a small occurrence. But he uses his professional skepticism to decide to look more into the problem. Another example of Will exercising professional skepticism was when he got the $320 from Jess. He received the money he was looking for, and the excuse she used made plenty of sense at the moment. But Will stayed skeptical and looked further into the money he was handed. 2) (a) Independence in appearance is when the perception of the auditor-client relationship is impaired. Independence in mental attitude is a bit different because it deals with improper biases when auditing a company. The mind must be kept separate from any preconceived notions or biases that you may have.
(b) The Code of Professional Conduct does address the personal client relationships because it is very important to understand the auditor-client relationship due to many biases that may arise, creating an impaired independence. Family members and financial interests could influence the auditor and impair his independence.
(c) I believe that the factor that plays the greatest role in determining auditor independence would be the relationship the auditor has with the client. It is difficult to write an opinion of a client that you are friends or family with that may hurt that client’s financial status. The relaxed relationships between accountants and clients were part of the reason we saw such huge failures like Enron and WorldCom.
(d) I believe…...

Similar Documents

Free Essay

Case 3

...Case 3 Southwest Airlines business-level strategy was cost leadership. They have employed numerous ways to reduce cost while still providing great service for their loyal customers. The best evidence of this strategy was the decision to use one type of aircraft which cut out expenses such as maintenance, tools, and parts to name a few. The implementation of blended winglets and the use of EcoPower engine wash, which saved the company millions, were also good indicators of a cost leadership strategy. Southwest Airlines has the capability to operate at a high profit margin. The company’s high profit margin of 4% is a direct result of the business-level strategy. Southwest Airlines was able to successfully lower costs in all the right places, and as a result, had the highest profit margin of all the airlines. Not only did they have the highest profit margin, but they also had the highest ROA of 1.2%, nearly double the closest competitor. Southwest Airlines competitive advantage is their ability to make a profit and successfully lower costs which is directly related to their cost leadership strategy. Southwest’s net income has increased each year from $484 million in 2005 to $499 million in 2006 and $645 million in 2007, they are also the only company besides JetBlue with a positive profit margin in 2008. Southwest is able to provide a low price flights, while maintaining low costs, and exceptional customer service in a presence of strong competitive forces. These...

Words: 260 - Pages: 2

Premium Essay

Case 3

...Case Problem Set 3: Problem 1: Young Professional magazine was developed for a target audience of recent college graduates who are in their first 10 years in a business/professional career. In its two years of publication the magazine has been fairly successful. Now the publisher is interested in expanding the magazine’s advertising base. Potential advertisers continually ask about the demographics and interests of subscribers to Young Professional. To collect this information the magazine has commissioned a survey to develop a profile of its subscribers. The survey results will be used to help the magazine choose articles of interest and provide advertisers with a profile of subscribers. As a new employee of the magazine, you have been asked to help analyze the survey results. Some of the survey questions follow: 1. What is your age? 2. Are you: Male___________ Female___________ 3. Do you plan on making any real estate purchases in the next two years? Yes _____ No _______ 4. What is the approximate total value of financial investments, exclusive of your home, owned by you or members of your household? 5. How many stock/bond/mutual fund transactions have you made in the past year? 6. Do you have broadband access at your home? Yes ______ No_________ 7. Please indicate your annual household income last year. 8. Do you have children? Yes _______ No__________ The file titled “Professional” has the responses to these questions.......

Words: 741 - Pages: 3

Free Essay

Case 3

...valor agregado el acercamiento al cliente o conocimiento del cliente. La utilización de esta información en la implementación de políticas de fidelización, entre otras, le permitirá al proveedor brindar un proceso mucho más ágil pues las “cookies” personalizan la búsqueda y la navegación del usuario. Conocer los hábitos de compra de los clientes permite al proveedor ofrecer una mejor calidad en su servicio en la medida que reduce costos de transacción enfocando sus servicios en el pago de ciertos productos (lo que genera más rentabilidad en lugar de todos y que no exista mucho movimiento de transacciones), es decir, especializando la ubicación geográfica; generar utilidades a través de publicidad y aprovechamiento de herramientas de CRM. 3. Las principales preocupaciones que tienen los consumidores frente a la utilización de pagos electrónicos y m-commerce están enfocadas en la seguridad del cliente. Dado que este tipo de transacciones se mueve en un mundo intangible y es a través de una red virtual, la confianza de este tipo de transacciones disminuye, sobre todo por la posibilidad de intermediación o intercepción por parte de otras personas. Dentro de las mayores preocupaciones se pueden nombrar medios de pago inseguros, violaciones de privacidad (robo de usuarios y cuentas), utilización de cuentas y datos para otros fines, entre otros....

Words: 385 - Pages: 2

Free Essay

Case 3

...Legal Case Study: A Ouestion of Futllity-Baby K, 832 F. Supp. 1993). 1022(E.D.Va. the In this case, infant girl wasborn with the congenitalmalformation anencephaly which left only her brain stem functioning.This limited function allowed for a conshe tinuation of respirationbut the infant was permanendy unconscious; could not see,or interact with her environment.At birth the physiciansand an institutional ethics committee advisedthe mother that the use of a ventilator that had been put wasfutile and should be withdrawn.The mother into placeawaitinga firm diagnosis the resistedthese recommendationsand, becauseof the disagreement, hospital attempted to have the baby transferredto another hospital.'Whenno comprehensive d to a nursing home. the hospital would acceptthe transfer, infant was m the following the transfer, infant wasreadmittedto the hosoccasions On several pital and given ventilatory support.Although the hospital attempted to resistthese The court deterst provide the services. the courts held that they admissions, mined that to refuse care to the infant would be in violation of the Emergency Medical Treatment and Active Labor Act (EMTALA), a federal statuteconcerning the child abuse, Americans with DisabilitiesAct (ADA), the Rehabilitation Act of 7973, end parental decision-making rights as guaranteed by the Fourteenth Amendment to the Constitution. 1. How would you resolvethis dilemma? to is resources it reasonable require the hospitalto provide 2 . In a time of......

Words: 394 - Pages: 2

Premium Essay

Fin555 Case 3

...suggested to keep this strategy, which may lower down the margins. 1. 2. 3. 1. Projected Cash Flow is shown in appendix. The non-operating income is treated as zero so that EBIT equals to operating income. Also, an PPE schedule is calculated to verify that the CapEx given by Ex.6 is corresponded to the change of PPE and Depr. The account on Ex.7 is titled as Cash Used in Operation, since Mercury will perform as a division of AGI after acquisition, and there is no information on excess cash. However, the effect of excess cash can be offset when determining Enterprise Value, and will not generate any influence on the change of NWC. 2. WACC is calculated based on the assumption that Risk-free rate is 4.69%, which is adopted from 5-year U.S. Treasury, since the projection data in Ex.7 is over five years, and there is no big difference between this 5-year rate and the rate for longer maturity, it is also suitable for calculating WACC used to discount terminal value. As given by the case, leverage is 20%, cost of debt is 6%, and tax rate is 40%. Because Victory Athletic is different with Mercury in scale and cash flow, its Unlevered Beta is crossed out to get an average of the Unlevered. Consequently, Equity Beta is 1.67 and WACC is 11.16%. 3. With the growing perpetuity approach, terminal value in 2011 will be $372,934,000, and levered value $310,646,000, which assumes growth rate as 3%. As stated in case, footwear was a “mature, and highly competitive industry, marked......

Words: 1037 - Pages: 5

Premium Essay

Case 16-3

...Case 16-3: Bill French Note: This case is unchanged from the Eleventh Edition. Approach This case requires quite a few calculations, but it is a good case for introducing students to the uses and limitations of break-even analysis. It can be used to discuss many of the hidden assumptions involved in such an approach. Some instructors also find it a good vehicle for discussing some of the human problems arising when a young, well-educated person begins working in a business. Finally, at The University of Michigan we have found it useful to defer this case until Chapter 26, when we teach several cases on linear programming: Bill French can be used as an introductory case to raise the issue of what product mix is optimal given resource and/or sales volume constraints. Comments on Questions Question 1 There is undoubtedly a long list of assumptions that can be related to this, or any, break-even analysis. Part of the problem of dealing with analyses of this sort is that they take on the characteristic of being static even though the form of presentation might lead one to believe that here is a moving, dynamic analysis that allows for a variety of changed conditions. To an extent this is true; but there are many conditions that are assumed to be constant. It is to the assumed constants that the students must ultimately direct their attention. For instance: 1. French has had to assume that the variability of the variable costs is constant. French has thus assumed a relatively......

Words: 2720 - Pages: 11

Premium Essay

Case 3

...Case 3-51 Pages 115 -117 1. Why might Koss management have placed so much trust in Sachdeva, along with minimal supervision and monitoring? Koss management might have placed so much trust in Sachdeva because she was is such a high position. She worked in the company as Vice President, when you are that high on the totem pole, you are given trust that you know what you are doing and that you want what is best for the company. Companies don’t hand out positions to people that have no clue as to what they are doing as well as someone that they believe will ruin the company. The same thing goes along with having minimal supervision and monitoring. She was a Vice President, someone that was supposed to be trusted, someone who was a leader, someone who was supposed to set an example. It just goes to show you that it is not always the person on the bottom of chain that needs to be watched. It is easier for higher up management and owners to sneak money away than the one who have minimal access to records and bank statements. 2. What was Grant Thornton’s obligation to uncover the fraud? Grant Thornton was Koss’s internal auditor. An internal auditor is defined as “An independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance......

Words: 1196 - Pages: 5

Free Essay

Case #3

...Case%Study%#3% HCM%4550% % Big%Bend%Medical%Center%has%a%diversified%facility%similar%to%many%care%centers% around%the%US,%with%a%majority%of%resources%utilized%by%the%hospital%through%inpatient%care.% Big%Bends%outpatient%facility%is%the%second%largest%revenue%stream%in%the%organization% followed%by%their%dialysis%center%which%is%fractionally%profitable.%The%dilemmas%faced%by%Big% Bend%on%how%to%allocate%the%costs%of%expanding%the%current%outpatient%facility%while% building%a%new%dialysis%center%in%a%more%profitable%area%are%complex.%The%solution%for% proper%cost%allocation%must%incorporate%both%strong%business%and%ethical%considerations% before%a%decision%can%be%made.%This%report%serves%as%a%discussion%of%alternative%allocation% methods%and%the%determination%of%a%suitable%and%mutually%beneficial%cost%structure%before% proceeding%with%the%expansion.% The%original%allocation%process%primarily%focuses%on%square%footage%and%disregards% profitability%or%revenue%generation%for%the%unexpanded%facility.%The%outpatient%center% generates%a%much%larger%revenue%stream.%Both%facilities%are%charged%$15%per%square%foot% even%though%the%outpatient%center%holds%80%%of%the%facilities%square%footage.%The%postM expansion%initial%allocation%of%costs%provides%an%expansion%of%the%outpatient%center%by% 20,000%square%feet,%while%the%new%dialysis%centers%size%remains%constant%at%20,000%square% feet.%The%initial%allocation%for%the%new%dialysis%facility%also%increases%square%footage%cost%by% 5%%while%...

Words: 457 - Pages: 2

Free Essay

Case 3-45

...Case Study Report Case 3-45 The requirement of independence, both independence in appearance and independence of mind, is presented by the rules of the AICPA code of professional conduct. Every practitioner in public accounting profession is required to keep their independence and objectives; however, independence area is so complex that not all specific situation can be answered by AICPA. Instead, in most situations, the public accounting firm and auditors should make their own decisions by professional judgments to avoid possible threatens to independence. This is a case study report of Case 3-45, which is the best case to get a better understanding of these difficult situations that relate to auditors' independence. This report is presented in three parts: case introduction, case 1 analysis, case 2 analysis, conclusion and further study. In case introduction part, the firm and case overview is briefly introduced. In following two parts, case 1 analysis and case 2 analysis, include the detailed case overview, analysis according to AICPA rules and references, and opinions over each case. In the final conclusion and further study, the report reaches to the conclusion of Case 3-45 and develops the further study suggestions. Case Introduction In Case 3-45, the main office of a public accounting firm, charged by partners, has met two difficult situations that may impair the firm’s independence. Don Moore and Mary Reed are two professional staff, who, respectively, are......

Words: 1620 - Pages: 7

Premium Essay

Case 3

...to patient-centred care, broadly categorised as care experience, clinical and operational benefits. Studies show that when healthcare administrators, providers, patients and families work in partnership, the quality and safety of health care rises, costs decrease, and provider and patient satisfaction increase.9 28 30- A study by Stone33 (cited in Charmel and Frampton 200834) examined data for inpatient units at two similar hospitals in the US over five years. One hospital introduced an extensive program of patient-centred practices, and the other continued their usual practices. The study found that the patient-centred inpatient unit consistently demonstrated a shorter average length of stay; a statistically significantly lower cost per case; a shift in emphasis from the use of higher cost staff to lower cost staff; and higher than average overall patient satisfaction scores. Similarly, Iacono35 found that patient satisfaction rates in 12 hospitals using the Planetree method (see Section 2.5) increased after implementing the patient-centred approach. Other benefits associated with patient-centred care include decreased mortality,36 decreased emergency department return visits, fewer medication errors, lower infection rates,37 higher functional status,38 improved clinical care,39 and improved liability claims experience.34 In the care of patients with chronic conditions, studies indicate that patient-centred approaches can improve disease management; increase both patient and...

Words: 1901 - Pages: 8

Premium Essay

Case 3

...Logan Armbruster September 17, 2014 Business 481 Case 3.1 1. Did New London treat Susette Kelo and her neighbors fairly? Assuming that the proposed development would help to revitalize New London, is it just for the city to appropriate private property around Fort Trumbull? a. I believe that New London treated Kelo and her neighbors as fair as they could. The proposed development would hope to attract new development, which would help revitalize the community and bring in tax revenue. I believe it’s just for the city to appropriate private property around Fort Trumbull because of their power of eminent domain. 2. Are towns such as New London and Salina pursuing wise, beneficial, and progressive social policies, or are their actions socially harmful and biased against ordinary working people and small-business owners? a. I believe that New London and Salina are pursuing progressive social policies but their actions are socially harmful to the homeowners of the areas that they are taking over with their eminent domain right. 3. Do you believe that eminent domain is a morally legitimate right of government? Explain why or why not. a. I believe that eminent domain is a morally legitimate right of government. I feel this way because you are being compensated for your loss of property with either money or land or both. If the area where your home is located is potentially a prime area that could bring in new development and revitalize a......

Words: 547 - Pages: 3

Premium Essay

Case 3

...Acc 600 CASE 3 Presented below are four independent situations which you as a Manager Trainee employed with Your Company have been asked to evaluate. Evaluate each situation based on what each requires. To receive a promotion depends upon how your respond. Situation One Your Company makes 45,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct material $16.00 Direct labor 20.00 Variable manufacturing overhead 5.00 Fixed manufacturing overhead 23.00 Unit product cost $64.00 An outside supplier has offered to sell the company all of these parts it needs for $53.00 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $275,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $16.00 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. Required: a. How much of the unit product cost of $64.00 is relevant in the decision of whether to make or buy the part? Relevant cost per unit $ Direct materials-$16.00 Direct labor-......

Words: 1722 - Pages: 7

Premium Essay

Case 3

...will reduce the chance of oil leaks, spills, and also explosions. Not only will it affect the community and the public, but also the stakeholders reputation and public pressure and criticism that they have to further deal with. 2. Compare the risk that BP, Exxon, and the fracking industry continue to face in providing adequate supply of energy? The main risks that each company will face are leaks, spills, and explosions happening. Other than those main 3, they also have to deal with reputation of customers and people who buy their oil. For instance, a loyal BP customer found out about the oil spill harming the ocean, now he will probably switch to Shell oil because their gas isn’t harming the environment. Also, both deal with political and financial risk. Activist groups will bring pressure on them. For example the National Resource Defense Council. Lastly, financial risk all the money you spend trying to repair and clean up oil spills, you could’ve avoided that and the money could’ve went to a better cause. 3. How can ethical leadership help the oil and gas industry to manage risk? Ethical leadership and help risk management by helping the environmental risk with organizations such as the IPIECA. Having a trustworthy organization that can stand up and speak for your problems would be highly beneficial by gaining trust from the public back again. Also, taking responsibility on both high and lower level positions of the issue will help manage risk too....

Words: 295 - Pages: 2

Premium Essay

Case 3

...116.223/F435/W13/F435All4Feb12.html Problem #2: (Winter 2013) Salvage value = $28,000 tax basis = $19,000 tax rate = 30%. Presented and discussed in class on Feb. 12, 2013: http://10.101.116.223/F435/W13/F435All4Feb12.html Problem 3: (Winter 2013) Salvage Value = $84,000 tax basis $92,000 tax rate = 30% Presented and discussed in class on Feb. 12, 2013: http://10.101.116.223/F435/W13/F435All4Feb12.html Problem #4: (Spring 2014) Machine costs $50,000 now Depreciation over a 5-year MACRS life Three years from now, we will sell this machine for $11,000. What will be the ATSV of the machine in three years? 34% Presented and discussed in May 7, 2014, class: http://10.101.116.223/F435/S14/F435All4May7.html Problem #5: (From Quiz #3-B, Fall 2014) initial cost = $10,417,000.00 expected salvage value in 10 years= $3,260,000 marginal tax rate = 34% 15-year MACRS depreciation Problem #6: (From class on Nov. 4, 2014, when preparing for HW#5) Old Machine: marginal tax rate = 34% if sold now, salvage value = $4,000 net book value or tax basis = $2,100 if sold in 4 years, salvage value = $2,500 If kept, then depreciation will be: time depr(old) 1 $300 2 $200 3 $150 4 $100 Presented and discussed in Nov. 4, 2014, class: http://10.101.116.223/F435/f14/F435All4Nov4.html...

Words: 264 - Pages: 2

Premium Essay

Case Study 3

...FI504 Case Study 3 on Cash Budgeting The cash budget was covered during Week 4 when we covered TCO D and you read Chapter 7. There is also a practice case study to work on. Your Professor will provide the solution to the practice case study at the end of Week 5. This case study should be uploaded by 11:59PM Mountain time of the Sunday ending Week 6 to the Week 6 Assignment Dropbox. You are encouraged to use the Excel template file provided in Doc Sharing. The Oxford Company has budgeted sales revenues as follows: July August September Credit sales $30,000 $24,000 $18,000 Cash sales 18,000 51,000 39,000 Total sales $48,000 $75,000 $57,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are $65,000 in July, $45,000 in August, and $21,000 in September. Other budgeted cash receipts: (a) sale of plant assets for $12,350 in August, and (b) sale of new common stock for $16,850 in September. Other budgeted cash disbursements: (a) operating expenses of $6,750 each month, (b) selling and administrative expenses of $12,500 each month, (c) dividends of $19,000 will be paid in August, and (d) purchase of equipment for $6,000 cash in September. The company has a......

Words: 563 - Pages: 3

2 rponses | Victorian Toilet Roll Holder Silver Grey Iron Vintage Novelty Unusual Crown Old | Популярные приложения за последние 24 часов