This was my capstone thesis presentation

1. http://www.voki.com/presenter/playPresentation.php?id=8466a2b43729c29dcd7cc0fdfa1a9e7a

2. Definition of Auditing
The Institute of Internal Auditors (IIA) defines “an independent, objective
assurance and consulting activity designed to add value and improve an
organizations operation. 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 processes” (Hirth, 2010, 2).

3. Benefits
 Auditing has been perceived and has been that “life saver” for a
myriad of organizations by “discovering deviations from accepted
standards and instances of illegality, inefficiency, irregularly,
ineffectiveness, and “discontents that draw our attention to things
that simulation leaves out” (Turkle 2009, 5).
 “Internal auditing can more effectively assess the business, identify
areas for improvement, and contribute to managing business risk”
(Azam, 2011, 44).

4. Why Marketing
 Examining a company’s functional department helps determine the risk and threats a little
faster than examining the whole organization.
 The marketing department of any organization holds the key to a lot of the business
outcomes, such as sales, profit, customer satisfaction, and customer awareness. Bradley
(1995) agrees that “the marketing function permeates the entire organization and includes
all the activities which affect current and future buyer behavior of customers” (16).
 The Internal audit of the marketing department is considered a high risk due to the
demanding functions that this department has on the overall result of the company.
 Garrison, Noreen, & Brewer (2011) said “if the risks are not managed effectively, they can
infringe on a company’s ability to meet its goals” (20).
 According to the American Marketing Association (2011) marketing is defined as “the
process of planning and executing the conception, pricing, promotion and distribution of
ideas, goods and services to create exchange and satisfy individual and organizational
objectives”.

5. Effects of the 5 PP’s
 Price.
 “Pricing is one of the most difficult areas in marketing, since both strategic and
tactical aspects must be considered. Customers may relate price and quality: the higher
the price, the higher the perceived quality. In such circumstances, if the product design
is better than the average available, raising the price may increase sales” (Garrison,
2010, 91).
 Profit.
 Prices affects profit, Chonko (1995) agrees that “one of the major problems associated
with pricing is the pressure for profits” (208). Profits affects not only the organization
but the shareholders as well, “the seller is in business to make a profit because profits
are what keep organizations producing products into the future” (Chonko, 1995, 206).
 Product.
 “Product planning means selecting what to provide and sell, and how to match
products and services with the needs of the market. By concentrating on the product
alone, it is not easy to gain a sustainable competitive advantage in the market, since
most products can be imitated relatively easily” (Garrison, 2010, 90).

6. Effects of the 5 PP’s
 Promotion.
 “Promotion is a collection of methods by which the organization may inform
its customers of what is offered” (Bradley, 1995, 91). Promotion is important,
its main job is to persuade the customers to buy the organization’s products,
the hardest part of this marketing mix is “matching the medium with the
audience” (Bradley, 1995).
 Place.
 Place was not audited in this particular research study reason being it was
located unknown and simulated business.

7. Audit Results
Study was based onStudy was based on TraditionalTraditional andand Low EndLow End SegmentsSegments
Low EndLow End

8. Accounting PrinciplesAccounting Principles
 Pricing: Price Elasticity of Demand for a
Product.
 (2) PED = (Q1 – Q2) / (Q1) / (P1 – P2) / (P1)
 If PED > 1 then Demand is Price Elastic
(Demand is sensitive to price changes)
 If PED = 1 then Demand is Unit Elastic
 If PED < 1 then Demand is Price Inelastic
(Demand is not sensitive to price changes)
 Forecasting (Sales Budget)
 Contribution Margin Increase
Baker

9. Results
High RiskHigh Risk
Baldwin Sensor Company
Sales Budget
December 31, 2015-2017
Units
Baker Bead Bid Bold Buddy Year 2015
Sales 1000 1330 550 470 490 3840
Selling Price per sensor $24.50 $21.50 $33.25 $30.50 $30.00
Total Sales $24,500 $28,595 $18,288 $14,335 $14,700 $100,418
Baker Bead Bid Bold Buddy Year 2016
Sales 1650 1490 810 700 660 5310
Selling Price per sensor $26.50 $19.50 $34.25 $33.25 $29.50
Total Sales $43,725 $29,055 $27,743 $23,275 $19,470 $143,268
Baker Bead Bid Bold Buddy Year 2017
Sales 1593 1700 670 540 458 4961
Selling Price per sensor $26.50 $22.25 $36.75 $29.75 $32.00
Total Sales $42,215 $37,825 $24,623 $16,065 $14,656 $135,383
Actual Budget Variance Variance%
Sales Year 2015 $100,187.00 $100,418 -$231 -0.23%
Sales Year 2016 $125,410.00 $143,268 -$17,858 -12.46%
Sales Year 2017 $92,184.00 $135,383 -$43,199 -31.91%
Low RiskLow Risk
Marketing Production R&D Finance Neutral Total (N)
Marketing 2 - 1 1 - 4
Production - - 1 - 1 2
R&D 1 - 1 - - 2
Finance - 2 2 - 4
Total 3 0 5 3 1 12

10. Recommendations
 Baldwin must be prudent in forecasting and pricing
 According to Soukiazis & Antunes (2013), a company’s failure to keep products properly stocked
in inventory will cause the customer to find another firm with a substitute product that is lower in
price.

11. Recommendations
 Forecasted Contribution Margin Growth proves that with a higher contribution margin a better outcome of
sales would have occurred leaving Baldwin to be a sustainable company. In concluding the audit, Baldwin’s
first attempt should have been to formulate a strategy that entailed start pricing, then contributed to a sales
budget, giving them a leeway of space for failure in the first year, giving them ample time to secure a close
knit with their customer’s wants and needs.

12. ReferencesReferences
American Marketing Association. (2011). AMA Board approves new marketing
definition. Marketing News. P.5.
Azam, A. (2011). A sharper FOCUS. Internal Auditor, 68(1), 41-45.
Bradley, F. (1995). Marketing management: providing, communicating and delivering
value. Prentice Hall. (16-308).
CAPSIM Simulation. (2014). Team Member Guide. Retrieved on November 5, 2013 from
http://www.capsim.com/guides/capstone2013/the-guide/4-managing-your-company/43-productionf0e5.html
Chonko, L. (1995). Ethical decision making in marketing. Sage Publication. (11-206).
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2012). Managerial Accounting. 14th
Edition.
McGraw-Hill/Irwin. New York, NY
Hirth, B. R. (2010). Internal auditing is an asset for small companies as well as large ones.
Protiviti: Risk & Business Consulting Internal Auditing. pp. 1-5.
Turkle, S. (2009). Simulation and its discontents. The MIT Press Cambridge, Ma pp. 5-6.
Soukiazis, E., & Antunes, M. (2013).The Effects of Internal and External Imbalances on Italy´s Economic Growth. A Balance
of Payments Approach with Relative Prices No Neutral

13. QUESTIONSQUESTIONS