Jamel is suspected of fraud at the petrol station he manages. There are several signs pointing to fraud, including unusual behavior by Jamel showing signs of guilt, customer complaints of being shortchanged, discrepancies in the physical stock balance reports, insufficient cash deposits compared to reported sales, inaccurate sales records, and an adverse relationship between declining sales but increasing costs of sales over several years. Taken together, these factors suggest Jamel has been stealing money from the business through shortchanging customers and falsifying records to cover it up.
This document contains an analysis of issues facing Cold Cuts Ltd. It includes a SWOT analysis identifying strengths like specialized refrigeration technology but also weaknesses like higher costs. Financial analyses find reducing Secconz's contract could lower annual sales by $3.5 million. An ethical analysis examines paying an anti-dumping tax or bribing officials. Recommendations suggest improving production strategies to cut costs and seeking legal advice on the anti-dumping case.
Forensic auditors investigate financial fraud and other legal issues by applying accounting skills and knowledge. They are often hired by law enforcement, banks, insurance companies, and businesses to detect fraud, prevent fraud, provide expert testimony in court, and review internal controls. Forensic auditors must have strong analytical abilities, be detail-oriented, inquisitive, and able to gather and analyze financial evidence. Their work involves activities like tracing missing funds, reviewing documents for legal cases, and assisting with prosecuting financial crimes.
This document provides an overview of the history and development of accounting theory. It discusses key periods in the evolution of accounting theory including pre-theory, pragmatic accounting, normative accounting, and positive accounting. Recent developments have focused on establishing a conceptual framework to guide standard setting and harmonizing accounting practices through International Financial Reporting Standards. The goal is to develop a consistent set of principles that can evaluate practice and guide future development.
American International Group, Inc., also known as AIG, is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. As of December 31, 2016, AIG companies employed 56,400 people.The company operates through three core businesses: General Insurance, Life & Retirement, and a standalone technology-enabled subsidiary
There are two primary agency relationships in finance: between managers and stockholders, and between stockholders and creditors. Agency problems can arise in these relationships when the interests of the principal and agent conflict. For example, managers may make decisions to protect their jobs rather than maximize shareholder value. Four mechanisms aim to align manager and shareholder interests: managerial compensation, direct stockholder intervention, the threat of firing managers, and the threat of takeovers. Manager compensation includes bonuses, company stock, and stock options to better align interests.
Creative accounting refers to the practice of manipulating financial statements through the use of accounting policies or transactions to mislead users or make a company's financial position appear more favorable. It provides opportunities to manipulate figures through judgment calls or complex transactions. While some flexibility is allowed in accounting, creative accounting crosses ethical lines. It is used by companies to smooth earnings, hide bad years, or meet targets but ultimately hurts shareholders. Regulators aim to curb it by limiting choices, judgment, and artificial transactions.
WorldCom engaged in fraudulent accounting practices that inflated revenues and hid expenses, which ultimately led to its bankruptcy. Top executives pressured employees to manipulate financial reports in order to meet expectations. When the fraud was uncovered, it resulted in massive job losses, the loss of $180 billion in shareholder value, and damage to the telecom industry. The fraudulent culture was driven by autocratic leadership, lack of transparency, and failure of oversight by the board and auditors.
This document contains an analysis of issues facing Cold Cuts Ltd. It includes a SWOT analysis identifying strengths like specialized refrigeration technology but also weaknesses like higher costs. Financial analyses find reducing Secconz's contract could lower annual sales by $3.5 million. An ethical analysis examines paying an anti-dumping tax or bribing officials. Recommendations suggest improving production strategies to cut costs and seeking legal advice on the anti-dumping case.
Forensic auditors investigate financial fraud and other legal issues by applying accounting skills and knowledge. They are often hired by law enforcement, banks, insurance companies, and businesses to detect fraud, prevent fraud, provide expert testimony in court, and review internal controls. Forensic auditors must have strong analytical abilities, be detail-oriented, inquisitive, and able to gather and analyze financial evidence. Their work involves activities like tracing missing funds, reviewing documents for legal cases, and assisting with prosecuting financial crimes.
This document provides an overview of the history and development of accounting theory. It discusses key periods in the evolution of accounting theory including pre-theory, pragmatic accounting, normative accounting, and positive accounting. Recent developments have focused on establishing a conceptual framework to guide standard setting and harmonizing accounting practices through International Financial Reporting Standards. The goal is to develop a consistent set of principles that can evaluate practice and guide future development.
American International Group, Inc., also known as AIG, is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. As of December 31, 2016, AIG companies employed 56,400 people.The company operates through three core businesses: General Insurance, Life & Retirement, and a standalone technology-enabled subsidiary
There are two primary agency relationships in finance: between managers and stockholders, and between stockholders and creditors. Agency problems can arise in these relationships when the interests of the principal and agent conflict. For example, managers may make decisions to protect their jobs rather than maximize shareholder value. Four mechanisms aim to align manager and shareholder interests: managerial compensation, direct stockholder intervention, the threat of firing managers, and the threat of takeovers. Manager compensation includes bonuses, company stock, and stock options to better align interests.
Creative accounting refers to the practice of manipulating financial statements through the use of accounting policies or transactions to mislead users or make a company's financial position appear more favorable. It provides opportunities to manipulate figures through judgment calls or complex transactions. While some flexibility is allowed in accounting, creative accounting crosses ethical lines. It is used by companies to smooth earnings, hide bad years, or meet targets but ultimately hurts shareholders. Regulators aim to curb it by limiting choices, judgment, and artificial transactions.
WorldCom engaged in fraudulent accounting practices that inflated revenues and hid expenses, which ultimately led to its bankruptcy. Top executives pressured employees to manipulate financial reports in order to meet expectations. When the fraud was uncovered, it resulted in massive job losses, the loss of $180 billion in shareholder value, and damage to the telecom industry. The fraudulent culture was driven by autocratic leadership, lack of transparency, and failure of oversight by the board and auditors.
The document discusses the audit risk model, which states that audit risk (AR) is equal to inherent risk (IR) multiplied by control risk (CR) multiplied by detection risk (DR). It defines each component of the model. It also discusses how the different risk components are assessed and interrelated, how internal controls objectives are designed to prevent and detect misstatements, and the importance of risk assessment in an organization's internal controls.
Satyam Computers was founded in 1987 and converted to a public company in 1992. It offered IT services across sectors and was India's 4th largest software company. However, in 2009, its chairman B. Ramalinga Raju resigned after admitting to a corporate accounting fraud. He had inflated cash and bank balances, understated liabilities, and overstated debtors to mislead investors and acquire his family's companies. This led to investigations for breach of trust, cheating, and falsification of records. Reforms are needed in auditing practices, corporate governance laws, and oversight by independent directors to prevent such frauds in the future.
This document discusses key issues in corporate governance. It begins by defining corporate governance as the interaction between shareholders, the board of directors, and management in directing a company. It then lists 7 main issues: 1) Remuneration and rewarding of directors, 2) The board's responsibility for risk management and internal controls, 3) Reliability of financial reporting and external auditors, 4) Duties of directors, 5) Shareholders' rights and responsibilities, 6) Separation of the CEO and chairperson roles, and 7) Corporate social responsibility and business ethics. For each issue, it provides 1-2 paragraphs explaining the relevance and concerns around each topic.
Parmalat was an Italian dairy company founded in 1961 that grew into a multinational food corporation. However, in the early 2000s it was revealed that Parmalat had been hiding billions in debts through complex fraudulent accounting schemes for over a decade. The company used offshores subsidiaries and fake bank accounts to hide losses and inflate assets. This resulted in the largest corporate bankruptcy in Europe at the time. After restructuring, Parmalat emerged from bankruptcy focused on its core dairy business under new leadership. However, the scandal revealed issues with lack of oversight, independence, and due diligence from banks and auditors involved with Parmalat.
This document discusses the concept of insider trading, providing examples and outlining the key dimensions. Insider trading involves someone connected to a company trading securities based on non-public information for personal gain at the expense of others. It gives the example of HLL purchasing shares in BBLIL weeks before announcing their merger. Insider trading undermines market integrity and investor confidence. While unethical, it is also illegal in most countries as it involves the breach of trust and unfair exploitation of information asymmetries.
WorldCom announced in June 2002 that it intended to restate its financial statements for 2001 and Q1 2002, revealing $3.8 billion in improper accounting transfers from line cost expenses to asset accounts. Less than a month later, WorldCom filed for Chapter 11 bankruptcy. It was subsequently discovered that an additional $3.8 billion in earnings had been improperly reported from 1999-Q1 2002. The fraud was carried out through improper reductions of line costs and false revenue adjustments. Key players involved included CEO Bernard Ebbers and CFO Scott Sullivan. The toxic culture and lack of board oversight enabled the massive accounting fraud.
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
The document discusses audit procedures for receivables. It describes key assertions that apply to receivables like existence, completeness, and valuation. It then outlines specific audit procedures to test each assertion, such as positive confirmation of receivable balances, testing for cut-off of revenue around the year-end, and analytical procedures to assess completeness of sales and receivables. The document also discusses factors to consider in selecting samples for confirmation and evaluating the reliability of confirmation responses.
The document summarizes several theories of regulation that are relevant to accounting, including:
1) Efficient market theory and how market failures necessitate regulation of financial reporting.
2) Agency theory and how information asymmetries between managers and shareholders/creditors require accounting regulation.
3) Three theories of regulation - public interest theory, regulatory capture theory, and private interest theory - and how they have been applied to accounting standard setting.
4) Key elements of a regulatory framework for financial reporting such as statutory requirements, corporate governance, auditing oversight, and enforcement bodies.
Chicken Run Case Study: En Selamat (Kluang)Nur Fateen
The document discusses issues facing Excel Poultry & Meat Sdn Bhd (EPM) including weak financial performance, ineffective management style, and lack of internal controls. Recommendations are provided to increase revenue, improve leadership, and establish clear policies/procedures including segregation of duties, documentation, and internal auditing. The key issue identified is EPM's weak internal controls, which creates opportunities for fraud and hurts business performance. Strengthening internal controls is seen as essential.
This document discusses several ethical issues that accountants may face, including fraudulent financial reporting, misappropriation of assets, disclosure violations, pressure from management, and the effects of greed. It notes that accountants have a duty to report discovered accounting violations but may face dilemmas due to potential consequences like job losses or criminal charges. Accountants should prioritize ensuring ethical guidelines are followed over desires for money or positive financial presentations. The document provides examples of ethical breaches like omitting financial records or directly manipulating numbers. It suggests reviewing the Allen Stanford case for examples of how these issues arise.
Ramalinga Raju, the former chairman of Satyam Computers, confessed in 2009 to manipulating the company's accounting for years and overstating assets by $1.47 billion. He had created fake bank accounts and salary accounts to inflate Satyam's financial reports. The fraud went undetected by PwC, who had audited Satyam for 9 years. The scandal severely damaged investor trust, India's IT sector, and the country's reputation. It highlighted the need for stronger corporate governance and internal controls to prevent such accounting frauds. Tech Mahindra later acquired Satyam to restore stability.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
The document discusses the skills, ethics, and ethical conduct required of forensic experts. It defines forensic accounting and outlines the key skills needed, including accounting, auditing, investigative skills, legal knowledge, and information technology skills. It also discusses various theories of ethics and provides examples of potential ethical dilemmas in business situations involving discrimination and treatment of business partners. Maintaining high ethical standards is important for forensic experts in their work.
Audit of the acquisition and payment cyclesellyhood
This document discusses the audit of the acquisition and payment cycle. It covers testing internal controls, performing substantive tests of transactions, and testing accounts payable. Key parts of the cycle include processing purchase orders and cash disbursements. Analytical procedures and tests of details are used to audit the accounts payable balance. E-commerce has increased electronic linkages between suppliers and customers.
Corporate Governance Definition and PracticeBolaji Okusaga
This document defines corporate governance and outlines its principles and practices. It discusses the need for corporate governance due to large corporations, financial crises, and reporting issues. Corporate governance establishes accountability, fairness, transparency, and independence. It defines the relationships between a company's management, board, shareholders and stakeholders. The pillars of corporate governance are defined as accountability, fairness, protection of shareholder rights, and transparency. The document then outlines best practices for board composition, appointment of directors, separation of the chairman and CEO roles, responsibilities of directors, access to information, remuneration, audit and remuneration committees, financial reporting, delegation, and communication with shareholders.
The Enron scandal involved accounting fraud at the now-bankrupt Enron Corporation. Enron used accounting loopholes and complex special purpose entities to hide billions in debt from failed deals and projects. When this was revealed, Enron's stock price plummeted and the company declared bankruptcy in 2001. Thousands of employees lost their jobs and retirement savings. The scandal damaged trust in financial markets and led to new regulations like the Sarbanes-Oxley Act of 2002.
This study examines the relationship between corporate governance practices and financial performance of hotel and travel sector companies in Sri Lanka. It analyzes board structure components like board size, percentage of non-executive directors, insider ownership, and female director representation. The study finds a significant positive correlation between insider ownership percentage and return on equity (ROE). It also finds an inverse relationship between ROE and board size and percentage of non-executive directors. Descriptive statistics show on average boards have 9 members with 74% being non-executive directors and 8% female representation.
The Satyam case involved a $1.4 billion corporate governance fraud at Satyam, India's fourth largest IT company. The founder, Ramalinga Raju, admitted to falsifying Satyam's accounts for several years. Weak corporate governance allowed the fraud to occur, as the board and auditors failed to prevent it. The fraud had major implications, including difficulty retaining clients, damage to India's reputation, and calls for stronger corporate governance laws in India. The case demonstrates issues with agency theory and transaction cost theory, showing how failures in the relationship between agents and principals can harm an organization.
The document summarizes the Satyam scam, one of India's largest corporate frauds. Ramalinga Raju, founder and chairman of Satyam Computers, admitted in January 2009 to inflating the company's accounts by over $1 billion USD. An investigation found that Raju had misrepresented financial records and profits to investors and regulators for years. As a result of the fraud being revealed, Satyam's stock price collapsed and the company was removed from stock indices. The scam had widespread negative impacts in India, damaging the country's economic and corporate governance reputation.
HCF is a Malaysian fashion company that owns 3 factories. It is considering expanding to China by setting up its own factory or entering a joint venture. Alternatively, it could stay in Malaysia. The document analyzes these options and provides recommendations. It recommends closing the Jitra and Chiang Mai factories, outsourcing production to China to reduce costs, finding new customers, and producing its own clothing label.
To make things easy, if you want to present this case.. please make it group discussion,forum and meeting.. Helps to deliver more point.. Straight to answer the question in case.. so you will not 'BELOK2'.. Jia yuu
The document discusses the audit risk model, which states that audit risk (AR) is equal to inherent risk (IR) multiplied by control risk (CR) multiplied by detection risk (DR). It defines each component of the model. It also discusses how the different risk components are assessed and interrelated, how internal controls objectives are designed to prevent and detect misstatements, and the importance of risk assessment in an organization's internal controls.
Satyam Computers was founded in 1987 and converted to a public company in 1992. It offered IT services across sectors and was India's 4th largest software company. However, in 2009, its chairman B. Ramalinga Raju resigned after admitting to a corporate accounting fraud. He had inflated cash and bank balances, understated liabilities, and overstated debtors to mislead investors and acquire his family's companies. This led to investigations for breach of trust, cheating, and falsification of records. Reforms are needed in auditing practices, corporate governance laws, and oversight by independent directors to prevent such frauds in the future.
This document discusses key issues in corporate governance. It begins by defining corporate governance as the interaction between shareholders, the board of directors, and management in directing a company. It then lists 7 main issues: 1) Remuneration and rewarding of directors, 2) The board's responsibility for risk management and internal controls, 3) Reliability of financial reporting and external auditors, 4) Duties of directors, 5) Shareholders' rights and responsibilities, 6) Separation of the CEO and chairperson roles, and 7) Corporate social responsibility and business ethics. For each issue, it provides 1-2 paragraphs explaining the relevance and concerns around each topic.
Parmalat was an Italian dairy company founded in 1961 that grew into a multinational food corporation. However, in the early 2000s it was revealed that Parmalat had been hiding billions in debts through complex fraudulent accounting schemes for over a decade. The company used offshores subsidiaries and fake bank accounts to hide losses and inflate assets. This resulted in the largest corporate bankruptcy in Europe at the time. After restructuring, Parmalat emerged from bankruptcy focused on its core dairy business under new leadership. However, the scandal revealed issues with lack of oversight, independence, and due diligence from banks and auditors involved with Parmalat.
This document discusses the concept of insider trading, providing examples and outlining the key dimensions. Insider trading involves someone connected to a company trading securities based on non-public information for personal gain at the expense of others. It gives the example of HLL purchasing shares in BBLIL weeks before announcing their merger. Insider trading undermines market integrity and investor confidence. While unethical, it is also illegal in most countries as it involves the breach of trust and unfair exploitation of information asymmetries.
WorldCom announced in June 2002 that it intended to restate its financial statements for 2001 and Q1 2002, revealing $3.8 billion in improper accounting transfers from line cost expenses to asset accounts. Less than a month later, WorldCom filed for Chapter 11 bankruptcy. It was subsequently discovered that an additional $3.8 billion in earnings had been improperly reported from 1999-Q1 2002. The fraud was carried out through improper reductions of line costs and false revenue adjustments. Key players involved included CEO Bernard Ebbers and CFO Scott Sullivan. The toxic culture and lack of board oversight enabled the massive accounting fraud.
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
The document discusses audit procedures for receivables. It describes key assertions that apply to receivables like existence, completeness, and valuation. It then outlines specific audit procedures to test each assertion, such as positive confirmation of receivable balances, testing for cut-off of revenue around the year-end, and analytical procedures to assess completeness of sales and receivables. The document also discusses factors to consider in selecting samples for confirmation and evaluating the reliability of confirmation responses.
The document summarizes several theories of regulation that are relevant to accounting, including:
1) Efficient market theory and how market failures necessitate regulation of financial reporting.
2) Agency theory and how information asymmetries between managers and shareholders/creditors require accounting regulation.
3) Three theories of regulation - public interest theory, regulatory capture theory, and private interest theory - and how they have been applied to accounting standard setting.
4) Key elements of a regulatory framework for financial reporting such as statutory requirements, corporate governance, auditing oversight, and enforcement bodies.
Chicken Run Case Study: En Selamat (Kluang)Nur Fateen
The document discusses issues facing Excel Poultry & Meat Sdn Bhd (EPM) including weak financial performance, ineffective management style, and lack of internal controls. Recommendations are provided to increase revenue, improve leadership, and establish clear policies/procedures including segregation of duties, documentation, and internal auditing. The key issue identified is EPM's weak internal controls, which creates opportunities for fraud and hurts business performance. Strengthening internal controls is seen as essential.
This document discusses several ethical issues that accountants may face, including fraudulent financial reporting, misappropriation of assets, disclosure violations, pressure from management, and the effects of greed. It notes that accountants have a duty to report discovered accounting violations but may face dilemmas due to potential consequences like job losses or criminal charges. Accountants should prioritize ensuring ethical guidelines are followed over desires for money or positive financial presentations. The document provides examples of ethical breaches like omitting financial records or directly manipulating numbers. It suggests reviewing the Allen Stanford case for examples of how these issues arise.
Ramalinga Raju, the former chairman of Satyam Computers, confessed in 2009 to manipulating the company's accounting for years and overstating assets by $1.47 billion. He had created fake bank accounts and salary accounts to inflate Satyam's financial reports. The fraud went undetected by PwC, who had audited Satyam for 9 years. The scandal severely damaged investor trust, India's IT sector, and the country's reputation. It highlighted the need for stronger corporate governance and internal controls to prevent such accounting frauds. Tech Mahindra later acquired Satyam to restore stability.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
The document discusses the skills, ethics, and ethical conduct required of forensic experts. It defines forensic accounting and outlines the key skills needed, including accounting, auditing, investigative skills, legal knowledge, and information technology skills. It also discusses various theories of ethics and provides examples of potential ethical dilemmas in business situations involving discrimination and treatment of business partners. Maintaining high ethical standards is important for forensic experts in their work.
Audit of the acquisition and payment cyclesellyhood
This document discusses the audit of the acquisition and payment cycle. It covers testing internal controls, performing substantive tests of transactions, and testing accounts payable. Key parts of the cycle include processing purchase orders and cash disbursements. Analytical procedures and tests of details are used to audit the accounts payable balance. E-commerce has increased electronic linkages between suppliers and customers.
Corporate Governance Definition and PracticeBolaji Okusaga
This document defines corporate governance and outlines its principles and practices. It discusses the need for corporate governance due to large corporations, financial crises, and reporting issues. Corporate governance establishes accountability, fairness, transparency, and independence. It defines the relationships between a company's management, board, shareholders and stakeholders. The pillars of corporate governance are defined as accountability, fairness, protection of shareholder rights, and transparency. The document then outlines best practices for board composition, appointment of directors, separation of the chairman and CEO roles, responsibilities of directors, access to information, remuneration, audit and remuneration committees, financial reporting, delegation, and communication with shareholders.
The Enron scandal involved accounting fraud at the now-bankrupt Enron Corporation. Enron used accounting loopholes and complex special purpose entities to hide billions in debt from failed deals and projects. When this was revealed, Enron's stock price plummeted and the company declared bankruptcy in 2001. Thousands of employees lost their jobs and retirement savings. The scandal damaged trust in financial markets and led to new regulations like the Sarbanes-Oxley Act of 2002.
This study examines the relationship between corporate governance practices and financial performance of hotel and travel sector companies in Sri Lanka. It analyzes board structure components like board size, percentage of non-executive directors, insider ownership, and female director representation. The study finds a significant positive correlation between insider ownership percentage and return on equity (ROE). It also finds an inverse relationship between ROE and board size and percentage of non-executive directors. Descriptive statistics show on average boards have 9 members with 74% being non-executive directors and 8% female representation.
The Satyam case involved a $1.4 billion corporate governance fraud at Satyam, India's fourth largest IT company. The founder, Ramalinga Raju, admitted to falsifying Satyam's accounts for several years. Weak corporate governance allowed the fraud to occur, as the board and auditors failed to prevent it. The fraud had major implications, including difficulty retaining clients, damage to India's reputation, and calls for stronger corporate governance laws in India. The case demonstrates issues with agency theory and transaction cost theory, showing how failures in the relationship between agents and principals can harm an organization.
The document summarizes the Satyam scam, one of India's largest corporate frauds. Ramalinga Raju, founder and chairman of Satyam Computers, admitted in January 2009 to inflating the company's accounts by over $1 billion USD. An investigation found that Raju had misrepresented financial records and profits to investors and regulators for years. As a result of the fraud being revealed, Satyam's stock price collapsed and the company was removed from stock indices. The scam had widespread negative impacts in India, damaging the country's economic and corporate governance reputation.
HCF is a Malaysian fashion company that owns 3 factories. It is considering expanding to China by setting up its own factory or entering a joint venture. Alternatively, it could stay in Malaysia. The document analyzes these options and provides recommendations. It recommends closing the Jitra and Chiang Mai factories, outsourcing production to China to reduce costs, finding new customers, and producing its own clothing label.
To make things easy, if you want to present this case.. please make it group discussion,forum and meeting.. Helps to deliver more point.. Straight to answer the question in case.. so you will not 'BELOK2'.. Jia yuu
The document discusses potential abuses of power and breaches of fiduciary duty by the management of DESB. Specifically, the controlling directors, EnZayed and PnHashimah, tried to pressure the auditor to not qualify the financial statements and planned to appoint a "friendly" auditor. They also charged personal expenses to the company and withdrew company money without documentation. The directors showed a lack of familiarity with accounting standards and their roles/duties under the Companies Act of 1965. Additionally, they wanted to remove the existing auditor before the end of their term without following proper procedures. In summary, the document analyzes whether the management of DESB abused their power or breached their fiduciary duties to the company and
The document discusses a shipping and maritime solutions company called MarineCorp. It provides an introduction to the company, noting it is a subsidiary of SURIA that operates two port subsidiaries. It then performs a SWOT analysis and identifies issues like a conflict between the chairman and CFO, high operating costs, and lack of quality staff. Finally, it ranks the three companies and provides recommendations to address the identified issues through restructuring, cost control, and improving financial perspectives.
Nokia product line management analysis - presentationpugcidiots
Nokia has historically had a large global market share in mobile phones, with over 220 phone models across multiple product series by 2011. However, its broad product portfolio led to problems like thinly scattered customers and high buyer bargaining power. Nokia addressed this with a product line strategy starting in 1994, creating global platforms for different standards. While this improved efficiency, variability in software needs increased. More recently, Nokia has focused on solutions like reducing product count while better understanding evolving customer needs, and using hierarchical and composition-oriented approaches to manage large software product families.
The document discusses Business Process Reengineering (BPR). It defines BPR as fundamentally rethinking and radically redesigning business processes to achieve dramatic improvements in areas like cost, quality, and speed. The document outlines several key steps to successfully implementing BPR, including preparing for reengineering, assessment of current processes, developing and testing new processes, and implementing the new system. It notes both advantages and disadvantages of BPR, such as improved customer focus but also potential lowered employee morale during changes. The document also compares BPR to Continuous Process Improvement (CPI), noting their differences in scope, management involvement, and approach to process changes.
This document defines and compares business process reengineering (BPR) and continuous process improvement (CPI). BPR involves fundamentally rethinking and radically redesigning business processes to achieve dramatic performance improvements, while CPI makes moderate changes to how an organization operates to take advantage of new opportunities or copy competitors. The document outlines the steps to successfully implement BPR, including preparing, assessing problems, developing solutions, benchmarking, testing, and implementing systems. It notes advantages of prioritizing customer needs and disadvantages like risk and low employee motivation. Finally, it compares BPR and CPI, noting their different definitions, management involvement, durations, and focuses.
The document discusses several areas for improvement at PHSB to address issues related to tanker maintenance and operations. It recommends that PHSB (1) conduct training programs for staff to increase knowledge of tanker maintenance and prevent breakdowns, (2) implement a preventative maintenance program to focus on energy savings through leak detection and equipment alignment, and (3) utilize internal audits to improve financial performance by addressing problems like tanker siphoning through a fleet management system, increasing driver compensation to reduce turnover, and monitoring tanker temperatures to prevent cargo contamination.
Ethical dilemma lying in business ( naeem khan )Naeem Khan
Lying in business can sometimes be justified to help others or solve problems, as long as it is done with positive intentions like attracting investors to help a company. However, managers should not automatically fire employees for lying, but should first analyze the situation and reasons behind the lie, as employees may have felt they could not tell the truth. Withholding important information that interferes with other parties for one's own advantage is generally considered a form of lying, but hiding unimportant information that does not affect others may not be. Most people would likely lie if they had something significant to gain.
Case study shows how a restaurant chain rediscovered its purpose. By engaging in "voice-of-the customer" analytics, this restaurant was able to identify why their volume was declining and what they needed to do to rectify some shortcomings in their product offering. VOC Analytics uses a proprietary approach for converting textual brand reviews on social media into predictive metrics.
Ethical dilemmas refer to situations where justice and security officers must make difficult ethical decisions that have adverse consequences. They are often confronted with challenges where they must determine if doing something wrong is justified based on the circumstances. When performing their duties, these institutional actors must use caution and consider the moral limitations of their discretion.
One example is the use of deception in police investigations, such as surveillance devices or undercover work, which raises dilemmas about what is acceptable. In the legal system, judges also face dilemmas around allowing deceptive tactics or ensuring proper oversight. The specifics of each case are important.
In dispensing justice, there are also situations where choosing the lesser of two evils is necessary. Therefore,
The document provides an introduction and overview of Pareto analysis. It discusses how Vilfredo Pareto first observed the 80/20 principle in the distribution of wealth in Italy in the late 19th century. Joseph Juran later applied this principle to quality control, giving rise to Pareto analysis. The document then defines Pareto analysis and outlines the typical six-step process for conducting a Pareto analysis to identify the vital few causes of problems. Several applications and advantages of Pareto analysis in management and accounting are also discussed.
Este documento describe los 9 roles de equipo identificados por Belbin y resume brevemente la contribución y debilidad permitida de cada rol. Los roles incluyen Cerebro, Investigador de Recursos, Coordinador, Impulsor, Monitor Evaluador, Cohesionador, Implementador, Finalizador y Especialista. Cada rol juega un papel diferente en el equipo y tiene fortalezas y debilidades únicas.
The document provides a case study of the McDonald's restaurant located in Naraina, New Delhi. It summarizes that the McDonald's brothers started the first McDonald's restaurant in 1940 in California, initially as a hot dog stand before focusing on hamburgers. The case study then describes the location, layout, and features of the specific McDonald's restaurant in New Delhi, including details about its basement, ground floor, first floor, kitchen, menu, and seating capacity. Floor plans and pictures of the restaurant are also included.
The document provides an overview of 7 quality control tools: Pareto diagram, stratification, scatter diagram, cause and effect diagram, histogram, check sheet, and control chart/graph. It describes each tool, including what they are, when they are used, and the typical results obtained from each tool. The tools are used to collect and analyze data, identify root causes, measure results, and help solve problems in quality control.
1) The document analyzes potential accounting issues at GMCR based on its financial statements from 2008-2012. Ratios show declining profitability and liquidity during this period.
2) Red flags include abnormal ratios in 2009-2011, and stock price volatility during this period.
3) Major issues identified are revenue inflation through channel stuffing and providing excessive customer credits, as shown by inflated receivables. High costs and low capital expenditures also impacted margins. Restatements reduced reported revenue.
- Walmart reported record second quarter earnings for fiscal year 2009, with net sales of over $101.6 billion, a 10.4% increase from the previous year, and income from continuing operations of $3.385 billion, a 9.3% increase.
- The company raised its full-year earnings forecast, expecting earnings per share from continuing operations to be between $3.43 to $3.50, up from a previous range.
- For the third quarter of fiscal year 2009, the company estimates comparable store sales in the US to increase between 1-2% and earnings per share to be between $0.73-$0.76.
1) The general manager of Fairmont Hotel is analyzing the financial condition of the hotel and whether a proposed renovation and expansion plan will be financially beneficial.
2) Based on the 2004 financial statements, the net income was $1,130,000 and projections estimate the net income would increase to $3,278,261 in 2005 with the expansion.
3) However, taking future years into account and projecting increased operating and fixed expenses while revenue remains constant, the net income is estimated to decrease annually after 2005 to $1,803,902 in 2006, $1,147,108 in 2007, and $491,314 in 2008, dropping below 2004 levels within three years.
This document discusses financial ratio analysis and capital budgeting techniques. It provides ratios to evaluate a company's profitability, liquidity, efficiency, and capital structure. Ratios like gross profit margin, current ratio, and gearing ratio are examined. It also compares two potential projects (Project X and Y) using payback period, net present value (NPV), and internal rate of return (IRR). Project X is recommended as it has a shorter payback period of 1.85 years, higher NPV of €29.92 million, and IRR of 24.49%, compared to Project Y. Additional factors for investment decisions and difficulties in capital budgeting are also outlined.
1. NTN's financial results for FY2019 showed a net loss of 44 billion yen, the worst in company history. This was largely due to an impairment loss of 29 billion yen related to unprofitable factories and businesses.
2. The impairment loss was significantly higher than initial estimates of under 2 billion yen due to the auditor requiring COVID-19's impact to be included in calculations. This led to more conservative business forecasts and higher impairment losses.
3. Several cost cutting measures were undertaken, leading to reductions in labor costs and expenses. However, declining sales volumes had a major negative scale effect on profits, and price competition in the automotive sector continued to be a challenge.
- Columbia Sportswear reported a 9% decrease in first quarter 2009 net sales compared to first quarter 2008, with net income decreasing 65% over the same period.
- Global fall 2009 order backlog was down 15% from the previous year, reflecting weak retail conditions and financial challenges facing customers.
- For the full year 2009, the company expects net sales to decline in the low double-digits and operating income margin to decrease 300-350 basis points compared to 2008.
- Ball Corporation reported its fourth quarter and full-year 2008 earnings. On a comparable basis, diluted EPS was $3.61 for 2008, up from $3.50 in 2007.
- Several business segments performed well despite the economic downturn, including aerospace and food and household products. However, beverage cans and plastics saw lower volumes and earnings.
- Looking ahead, Ball expects to reduce costs through plant closures and initiatives. However, challenges remain due to the uncertain economic environment.
- Ball Corporation reported its fourth quarter and full-year 2008 earnings. On a comparable basis, diluted EPS was $3.61 for 2008, up from $3.50 in 2007.
- Several business segments performed well despite the economic downturn, including aerospace and food and household products. However, beverage cans and plastics saw lower volumes and earnings.
- Looking ahead, Ball expects to reduce costs through plant closures and initiatives. However, challenges remain due to the uncertain economic environment.
- The document discusses Triangle Manufactured Homes (TMH), a leading retailer of manufactured homes in the US market.
- TMH has grown through acquisitions of other retailers, expanding into new markets. It also acquired some manufacturing facilities to supply custom homes.
- The document performs business and accounting analyses of TMH to assess the risks it faces, examining its annual report, financial condition, results of operations, and accounting policies.
wal mart store Quarterly Earnings Releases2008finance1
Wal-Mart reported record sales and earnings for the fourth quarter and full fiscal year of 2008. Fourth quarter sales reached $106.3 billion, an 8.3% increase over the previous year. Net income increased 4% to $4.1 billion compared to $3.9 billion last year. For the full fiscal year, sales increased 8.6% to $374.5 billion and net income grew 5.8% to $12.9 billion. The company expects continued earnings growth in fiscal year 2009, forecasting earnings per share between $3.30-$3.43.
TEMPLATE
Financial Analysis Task I
Competition Bikes, Inc.A1.a. Competition Bikes Horizontal Analysis: Results
The present period of the company has been experiencing a notable decrease in the Net Sales as opposed to our earlier fiscal years. Financial Years 6 and 7 were markedly better than our current 7 and 8. A quick deduction and study has determined the reason for this economic downturn to be the present economy. Competition Bikes, Inc. does however, expect an increase in Unit Sales over the course of the next three years, but will also be projected to remain below our High Unit sales of Year 7.
Considering that our sales have decreased, it is positive to note that the percentage-to-Net Sales of the Cost of Goods Sold remained around 73% through years 6 – 8 in our Vertical Analysis. What this depicts is that the price of our raw materials has remained rather stagnant, as has the costs of labor. We have also reduced our Advertising Costs by approximately 16.3%, whereas it had been up by 37.5% percent from Year 6 to 7. This is due to two consecutive years of reduced sales of our product. As for Marketing, it is normal procedure to reduce its budgets when the economy enters a bear market. However, this is not always the wisest course of action due to the fact that companies must fight within an ever-constricting marketplace for potential sales that still remain.
Pertaining to our overall General and Administrative Expenses our company has remained in a relatively flat status with reviewed over the past several years to the present. There is a notable increase in our overall Utilities expenses, ranging around 11.1%, which is probably because of increased power costs passed on from electrical companies. That is up, and impressively so from our Year 6 to 7 which Utilities were only hovering in the 3.8% range. There is, however, a particular section that is worthy of a more detailed examination. The Other General and Admin Expenses are up. Way up, in fact. Estimates are a very noticeable 7.6% ($12,000.00) from last year. That’s a marked improvement from Year 6 to 7 where we were reporting 31.1% (37,500.00)! All the while our expected sales have decreased by 15% in the same timeframe. Even more concerning is our Operations. The Operating Income has dropped by a staggering -69.1%! This is a considerable difference from our Year 6 – 7 Operating Income, which was reported at $191,820.00 or 154.6%!
It should go without saying that our Operating Income, that is, things like the Utilities and Salaries, are always paid regardless of whether or not there is profitable sales; and this in turn is severely shrinking our corporate earnings cash considerably more than just a reduction in our sales percentages. One of the quick solutions to overcome this issue would be to reduce the number of hours that our Workforce in Production utilizes. This would allow for the Operating Income figure to reduce along with the reduced am ...
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]Tom .docxtidwellveronique
CASE 8–30 Evaluating a Company’s Budget Procedures [LO8–1]
Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department.
The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president’s son, had become plant manager a year earlier.
As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I never know whether my department’s accounting reports will show good or bad performance. I’m beginning to expect the worst. If the accountants say I saved the company a dollar, I’m called ‘Sir,’ but if I spend even a little too much—boy, do I get in trouble. I don’t know if I can hold on until I retire.”
Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with Ferguson & Son for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department.
When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff “tighten” the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant manager’s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father.
Tom Emory’s conversation with Jim Morris continued as follows:
Emory:
I really don’t understand. We’ve worked so hard to meet the budget, and the minute we do so they tighten it on us. We can’t work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don’t tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time.
Page 390
Morris:
I’m sorry about that, ...
The document discusses why the full benefits of reduced global crude oil prices have not been passed on to consumers in India. It notes that while crude oil prices have fallen significantly, petrol and diesel prices have only fallen by 10-15 rupees. This is because the government has used the opportunity to increase excise duties on petrol and diesel four times, capturing the savings for itself. The increased excise duties have allowed the government to generate additional revenue to reduce the fiscal deficit and improve India's financial situation. Exchange rate fluctuations have also contributed to Indian oil companies and consumers not gaining the full benefits of lower international crude prices.
Why the benefit of reduction in Crude oil prices has not been transferred to public? What are dynamics behind not reducing the Petrol and Diesel price significantly?
Yanbu Cement Company is seeking a loan of SR75 million from a bank for a period of 18 months. The document analyzes Yanbu Cement Company's financial statements over three years to assess the viability of extending the loan. Key ratios related to expenses, operations, marketability, coverage, liquidity, profitability, and financial leverage are positive overall, indicating effective cost management, increasing asset utilization, and improving profit margins. Based on the financial analysis, the company's performance has strengthened, suggesting it can repay the loan amount.
- Wal-Mart reported third quarter fiscal year 2009 results, with net sales increasing 7.5% to $97.6 billion and income from continuing operations increasing 6.6% to $3.03 billion compared to the previous year.
- US comparable store sales increased 2.7% for Walmart and 4.5% for Sam's Club. International sales grew 11.2% and segment operating income increased 10.6%.
- For the full fiscal year, Wal-Mart estimates diluted earnings per share will be between $3.42-$3.46, lowered from previous guidance due to currency exchange rate impacts.
James Avery jewelry sought to attract new customers with a new store prototype featuring digital signage. The signage tells the brand's story and highlights products in a dynamic way to engage customers. Pairs of video screens rotate messages about products and the brand's history and philosophy. This creates branded customer experiences that enhance approachability and visibility compared to static signage. The digital elements focus on connecting people to the brand through relevant experiences within different "shops" in the store highlighting products.
Analysing a business' gross profit marginGeoff Burton
A business’ gross profit margin is a major indicator to analysts about its overall profitability and long-term sustainability. It’s critical that the margin is understood as well as what drives it and why analysts should be worried if it drops. This presentation explains why the margin is so important and how to analyse it.
1 FIN 4303 – Commercial Banking Assignment – Part 1 VannaJoy20
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ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
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Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
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This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
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In this webinar, participants learned how to utilize Generative AI to streamline operations and elevate member engagement. Amazon Web Service experts provided a customer specific use cases and dived into low/no-code tools that are quick and easy to deploy through Amazon Web Service (AWS.)
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
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1. In our opinion we think that the possibility of Jamel short-changinng is high. We have
indentified the fraud symptoms as below:
1. Unusual behaviour - Jamel’s body language
Unusual behaviour is seen through an individual's recognizable behaviour pattern to
attempt to cope with the stress. The guilty leads to fear; fear leads to stress; and stress
leads to behaviour changes. Research in psychology reveals that when a person,
especially a first-time offender, commits a crime, he or she becomes engulfed by
emotions of fear and guilt. Those emotions cause the individual to experience a
significant amount of stress, and in order to cope with the stress, the individual will
exhibit unusual and recognizable behaviour patterns. In this case, Jamel’s behaviour is
very suspicious.
First, body language such as the facial expressions and body posture can show people
emotion and thinking especially when someone is trying to lying to another. In the
meeting between Jamel and Mat Jon, Jamel’s reaction and expressions make him to
be suspicious that he is doing something wrong and trying intentionally to cover it up
from others knowing, especially his Pak Long, Mat Jon.
We can see that Jamel looked very worry and nervous. He even trying hard to look
confident, in order to not want his uncle to be monitoring the business closely and do
not want his uncle to know what exactly happen in the business.
Moreover, when Mat Jon question to Jamel the problem that he found in the business,
he do not trying to explain to Mat Jon, but he go immediately on the defensive by
saying that he is struggling hard to monitor and checking everything. He even is rude
to his uncle and stormed off from the meeting when he feels Mat Jon do not believe in
him. Lying will make someone feel uncomfortable and become flustered and upset in
order to cover up what he trying to.
Through all the expression of Jamel in the conversation, we can saying that he feel
guilty and afraid that Mat Jon discover that he is short-changing in the Spetrol Station
business.
2. 2. Customer complaint
Mat Jon’s petrol station was being complained by the customers that came to re-fuelling
his car at the petrol station. Although he has pay the enough money, but he
cannot get the equivalent quantity of petrol and had simply being ignore. This mean
that someone have trying to hide the sales and short-changing the money. Through
this, Jamel is the one have the biggest suspicious to do the short changing because he
is the one that have the full charge in the Spetrol Station business.
3. Shortfall in physical balance of unleaded petrol
From the stock balance report, we have found many suspicious figures and the
balance of the stock in the report is far lower than the actual balance that the company
should have. There are some shortfalls in the physical balance of the unleaded petrol.
The amount of daily pump sales of unleaded petrol in stock balance report and the
sales amount in station collection reports were appearing repeating figures that did
not make sense, especially the figures of station collection in 21 and 27 July 2009
were totally same. Besides that, the figures were repeating in the same sequence that
usually would not happen in sales transactions. For more clearly to understand the real
condition, please refer to Appendix 1 and 2 where already bolded the repeating
figures. Moreover, the figures in the physical stock balance had been altered
intentionally by someone to hide the real stock balance.
Jamel, who fully in charge in the petrol station, should have to concern about the
stock balance. Through this, we can assume that Jamel might be intentionally to
manipulate the figure in the stock balance report.
Besides that, in 16 July, the received of petrol do not recorded in the physical stock
balance, but the cheque was still paying out at the date. In 31 July, the same situation
also happen again, just the cheque is still not paying out yet. From this we can making
assumption that there actually do not have any receipt of petrol, and the cheque that
debit out is for Jamel personal use and in order to cover the short-changing, he create
a false record in the receipt of petrol.
3. 4. Insufficient amount in cash deposit
Compare the daily cash sales receive with the amount in the bank statement, we can
find that the cash sales that deposit into the bank are lower than the actual sales, in the
amount around RM2000 for every cash sales deposit. The amounts that do not deposit
maybe are the short-changing of Jamal because it is not very possible that the station
need to keep in such a big amount of petty cash in the station for the daily use.
Moreover, the bank account had already overdraft of RM21, 019.42, while the bank
overdraft facility is only can up to RM20, 000 and Jamal do not even report this
situation to Mat Jon. From here, we can making the assumption that Jamal do not
want Mat Jon to realise that there are something’s amiss in the business, especially the
short-changing of the cash.
5. Inaccurate sales record
Base on the station collection in July 2009, the daily sales collections were differ
much for 1 July to 31 July. The sales figures for first two days were reasonable good,
it was around RM32,000, but it was dropped significantly in the end of the month.
The sales were drop to RM14,000 in 31st July.
From the report, we found that there are some suspicious amounts in the 1st and 2nd
July. For example, in 1st July, the daily pump sales of unleaded petrol are equal to
RM34 458.68, already exceed the total sales of the day (RM 32 220.40) without
including the other revenues that generate by the station. This might be done
intentionally or unintentionally. The balance gone without any reason and this is the
possibility of fraud occurred.
Jamel cannot explain the unusual sales when Mat Jon questions him. It is suspected
that sales were take place but without recording. Besides that, the total sales for July
were RM 538,139.80. However, according to the July 2009 bank statement, the total
credit amount only RM409,375.68. The difference was RM128,764.12. In other
words, the bank should be having RM128 thousand credit balance instead of RM21
thousand debit balance (overdraft). The amount maybe misappropriate by the
management.
4. 6. Adverse relationship between sales and cost of sales and potential shipments of
petrol were missing
2006 2007 2008
Sales 6,804,000 5,443,200 5,170,040
Cost of Sales 5,987,520 4,898,880 4,964,198
Estimated Cost of Sales 5,443,200 4,354,560 4,136,832
Differences in COS (Actual - Estimated) 544,320 544,320 827,366
Shipment of Petrol
9.55 9.55 14.5
(Differences in COS/RM 57,002.40)
Table above shows that the sales are decreased and the cost of sales are increased
from year 2006 to 2008. By assuming the gross profit margin is maintain in 20%, the
cost of sales was increase from 10% to 20% which is equal to 9.5-14.5 shipments of
petrol.
This is another symptom of fraud. It was quite unreasonable that when the revenues
were declining, the cost of sales was climbing up. This relationship did not make
sense. It was because when the revenue was declining, the cost of sales should not
have much change and even have changes, it will just be low increment such as
affected by the government policy in setting the price of fuel (APM formula).
However, in this case, the increasing of cost of sales may be high possibility attributed
by the dishonest staffs in misuse the business money to buy the petrol and sold it to
third party privately for personal gain. Thus, the revenue was kept declining and cost
of sales was increasing. If this was real, then we can explain the missing petrol in the
stock balance report.
5. Horizontal Analysis
Item/Year 2004 2005 2006 2007 2008
Sales 100% 105% 94.50% 75.60% 71.82%
Cogs 100% 105% 103.95% 85.05% 86.18%
Gross Profit 100% 105% 56.70% 37.80% 14.36%
Common-size (horizontal) analysis took place to compare the performance of the company
from year 2004 to 2008. Common-size analysis expresses comparisons in percentages. Thus,
it makes the comparison more preferable and meaningful than absolute amount. By using
year 2004 as the selected base year, the performance of the company was getting worse since
years 2006. Gross profit decreased approximately 43% in 2006, 62% in 2007 and 86% in
2008 (compare with year 2004).
The main concern is on the changes in the percentage of cost of sales. Cost of sales increased
slightly in year 2006 despite the gross profit slash 43% (in comparison with the base year,
2004). In addition, the gross profit for year 2007 was only 37.8% compare with year 2004,
but the cost of sales was 85% compare with the base year. Badly, the gross profit further
decrease in year 2008 to only 14% compare with year 2004, but the cost of sales increased
slightly compare with year 2007. There are three possibilities caused the problem:
No record for sales
The main concern’s here and the most probable reason for decrease in profit is there was a
fraud. In terms of percentage, the decreased in sales was relatively greater than the decrease
in cost of sales. In comparison with previous year figure, the sale decreased significantly
(10% in 2006, 20% in 2007, and 5% in 2008), but the cost of sales decreased relatively
slightly (1% in 2006 and 18% in 2007) and increase again in 2008 (1%). This may due to the
unrecorded sales. The cost of sales was incurred and recorded as expenses despite the sales
figure was manipulated by the management, in this case, Jamel. Thus, it leads to drop of sales
and increase in cost of sales and further slash the gross profit.
6. Increase in cost of sales
According to the horizontal analysis above, the sales decreased more than cost of sales. For
instance, the sales in year 2008 were 72% compare with base year. However, cost of sales
was 86% compare with the base year. This reflects that the cost of sales was relatively higher
than the sales made. High level of inflation may increase the cost of petrol thus leads to
decrease in profit.
Competition
The increase of competition since the second petrol station and third petrol station was
opened next to Mat Jon’s petrol station in year 2006 and 2008 respectively. Thus, this
affected Mat Jon’s business, the consumers have more options to get service in others petrol
station.
12. Irregularities In Sales And Cost Of Sales
From the case, Mat Jon realized that in the financial statements, the revenues were going down
but the cost of sales was steadily climbing up, there seems to be something wrong in it. Although
there are competitors like Caltex and Petronas, it is impossible for the revenue to go down so
drastically and the traffic volume is also high in that area, so it couldn’t affect so much on it.
This situation happened because someone was doing fraud. When sales were incurred, person
who is responsible didn’t record the transaction. It might be also cost of sales is incurred because
might be someone recording expenses that are not related to the cost of sales in the company.
Below is the table that shows how the profit decreases dramatically.
Gross Profit Margin Table
Item/Year 2004 2005 2006 2007 2008
Sales (A) 7,200,000 7,560,000 6,804,000 5,443,200 5,171,040
Cost of
5, 760,000 6,048,000 5,987,520 4,898,880 4,964,198
Sales
Gross profit
(B)
1,440,000 1,512,000 816,480 544,320 206,842
Gross Profit
Margin (B/A
x 100)
20% 20% 12% 10% 4%
To prevent this kind of thing from happening in the future, regular independent checks by an
accountant on the financial statements should be done to ensure that there are no irregularities
in it. This is to make sure that the manager is doing his job honestly. If there are any
irregularities in it, the accountant can discover it quickly and inform Mat Jon about it.
The significant differences in inventory in hand and inventory in record
According to the stock balance report (Unleaded Petrol), July 2009, there seems to be a
difference between the records and physical balance. Surely there is something wrong as huge
differences means there is a possibility of fraud. Based on Mat Jon, he found that some numbers
was very odd; in fact the balance is far lower than what Spetrol should have. Usually, the person
that can alter the records must be both responsible for recording the inventory in hand and in
record.
13. Stock Balance Report (Unleaded Petrol), July 2009 (Audited)
Date
July
2009
Daily
Pump
Sales
Receipt
s
Physic
al
Stock
Balanc
e
Physical
Stock
Balance
(Audited)
1 13647 32760 25131* 27162*
2 14701 10461 12461*
3 7542 4919 4919
4 6199 32760 28480 31480*
5 7973 23507 23507
6 5420 18087 18087
7 3647 14440 14440
8 8701 32760 34499 38499*
9 5542 32957 32957
10 2525 30432 30432
11 1973 23459 28459*
12 1420 32760 49799 59799*
13 8647 50152 51152*
14 4701 46451 46451
15 7542 38909 38909
16 6199 32760 32710 65470*
17 4973 27737 60497*
18 5420 22317 55077*
19 3647 18670 51430*
20 8701 9969 42729*
21 5542 32760 37187 69947*
22 2525 34662 67422*
23 4973 29689 62449*
24 611 29078 61838*
25 3647 32760 58191 90951*
26 5701 52490 85250*
27 5302 47188 79948*
28 2525 40633 77423*
29 1973 32760 55450 108210*
30 1420 50404 106790*
31 3651 32760 38960 135899*
From the table above, we can see that there are differences between the original physical stock
balance and the audited physical stock balance.
So the solution is that there must be segregation of duties between these two tasks. The concept
of segregation of duties is to having two people do a task together or splitting the task into parts
so that no one person handles the complete assignment. One person has to be responsible for the
recording of the physical balance and the other one is responsible for recording the book.
Other than that, the supervisor can also monitor the employee’s actions. When the supervisor
is monitoring him, chances for fraud to occur will be reduced. With this, the employees that have
14. any bad intention will be afraid that they will be caught and lose their job. The monitoring can
be done by supervisor to make sure the stock is in a good condition .By monitoring, we can
easily know the status of our stock. Besides that, by implementing physical safeguards such as
locks, keys, safes and fences to prohibit to access to the stock is also a good prevention.
Irregularities in the sales collection
Based from the station collections on July 2009, we can see that the sales from RM32, 000 plus
in the beginning of the month decrease to RM14, 000 plus in the end of the month. The sales
decreased by more than 50% from its original amount. That is really surprising as something had
gone wrong. Normally, even there are competitors; the sales can’t decrease so drastically.
Furthermore the price of the petrol is controlled, so it is less likely to affect the sales figure. In
addition, the station is located beside the BPK highway where the traffic volume is high. Surely,
the possibility of fraud is there.
In order to solve this, a good documentation should be in place assuming that before, the
management don’t really organize the documents especially sales receipts properly. All the
documents should be place in a cabinet and organized according their preference, for example by
dates. A systematic filing will help them to avoid losing any important documents. By having a
good documentation, Mat Jon can keep track of all the sales and he can easily check if there are
any discrepancies in the sales record. This will also ensure that time is not wasted in finding the
documents when needed. All these suggestion will help to eliminate any opportunities in doing
fraud.
Problems with the bank overdraft limit
According to the bank statement on July 2009, the closing balance is RM (21, 019.42) which is
really absurd because as stated by Mat Jon, the overdraft facility is only up to RM 20, 000. One
reason that this could happen is authorization is also given to Jamel, and this allow him increase
the overdraft amount. Probably the approval by either one of them (Jamel or Mat Jon) is
sufficient enough to grant the overdraft increase.
In order to prevent this from happening in the future, Mat Jon should ask the bank for dual
authorization so that Mat Jon is aware of what Jamel or the new manager (if Mat Jon decides
replace his nephew) is doing. From there, without Mat Jon authorization, the approval for
overdraft increase will be rejected.
15.
16. Selling the business to Robert or Continue to run the business
In this issue, Mat Jon need to consider whether continue to run this business but take over the
management from Jamel or was he better off selling the business to Robert. To make the
decision, we shall take a first look at the pros and cons of both choices. The following discuss
whether Mat Jon should continue the business or selling the business.
Selling the business to Robert
· Avoid from the current business problems
There is few reasons lead Mat Jon selling the business. First at all is Mat Jon can avoid from
the current business problems such as the problems in total sales and the cost of sales figures,
the shortfall in the physical balance of the unleaded petrol and so on. If Spetrol’s management
was successfully to solve all the problems, company’s financial position can be improved.
Otherwise, all of these problems might lead business to a more worse condition.
· Mat Jon are getting older
Mat Jon and his wife are getting older so he asks his nephew, Jamel to manage the business.
After that, Mat Jon had not paid much attention to the business because he assumed that
Jamel was managing fine. Now he realizes that Jamel was not managing the business well
and lead the business in a worse condition. So, if Mat Jon decides to sell the business to
Robert, he does not have to worry about the business problems. And then, Mat Jon has no
debts, can live comfortable and can spend more time with his family.
· Competitions
Besides, since the places of the Spetrol where it located between the Petronas and Caltex,
these two well known competitors might definitely threathen the Spetrol’s business in long-term.
This can reduce the possible of profits where the company is currently enjoying in
future. So, this is a strong reason that Mat Jon should consider to sell the business.
17. · Rebuild reputation
Next, by selling off the business, Spetrol can instead rebuild its reputation. This is because
Mr. Robert Leung is very confident about himself in handling those problems faced by
Spetrol. This can avoid Spetrol is being liquidated and at the same time the Spetrol’s brand
could be sustained. Thus, it can result in customers’ retention towards the company’s brand
and images.
Summary
Spetrol station is sandwiched between the two newer ones, which were operated by Caltex
and Petronas. This really affected Mat Jon’s business. During the morning rush hour had a
choice to turn to if there was a long queue at their petrol station. Besides, Jombeli store had
been showing sluggish sales of late. Moreover, it is suspected that Jamel involve in fraud or
defalcation in the petrol station’s income. Therefore, it is better for Mat Jon to sell the
business to Robert and Robert was fully confident he would be capable to turn around the
business. Furthermore, Mat Jon will not create a rift between him and his sister and brother-in-
law and can avoid all of the current problems of his business.
Continue to run the business but take over the management from Jamel
· Strategic location
Mat Jon also should not closed his business because his petrol station is situated a strategic
areas. That petrol station is closed to BPK highway and at Bintang Town that have three
residential areas which is Taman Sinar, Taman Matahari and Taman Bulan. There were also a
primary and secondary schools in the nearest and several rows of shop. On the eastern side
also has industrial area with a number of electronic factories and warehouses. 30kms from the
highway also situated a low cost air terminal.
· Many target customer
18. Mat Jon can have many regular customers such as vehicle from residential areas, taxis from
the air terminal, school buses from factory, primary and secondary school and also lorry from
and to the factories and warehouse. At Jombeli also have snack food that can be buy student
from nearest schools. Worker at that electronic factory also can by prepaid telephone at
Jombeli.
· Potential Business
Robert Leung was a successful entrepreneur and already owned two Spetrol outlets in the
Klang Valley and wish to buy over Mat Jon’s business by giving an offer. Robert was calling
Mat Jon almost every alternate day to try and persuade Mat Jon to sell off the business.
Indirectly, it shows that Spetrol station is a potential business if not Robert will not keen to
buy over the business by given an offer and pestering Mat Jon regarding the matter.
· Product diversification
Mat Jon should continue his business because his products are diversifying into many types
such as fuel, retail sales and manual car wash service. His business can satisfy his customer
based on product them sales for example of fuel that he sales is petrol for people who are
using car and motorcycle. Diesel fuel also will satisfy transport like bus or lorry and NGV
will satisfy vehicle like taxi. He also have retail sale store, Jombeli that sales items such as
pre paid telephone cards, bottled water, lubricants, newspapers and snack food
Summary
Mat Jon should continue the business because Spetrol station is located in a strategic and
convenient location with the high traffic volume. So, there is a reason why Robert is so keen
to buy the petrol station by giving an offer even he know about the condition of Mat Jon’s
business. With this reason, Mat Jon should not sell off the petrol station because it is a
potential business nad able to yield a high profit. Mat Jon should implement the control
mechanism as discussed above to protect the business and to prevent a recurrence of the
19. current problems, but not sell the business. Mat Jon should face and resolve the problems
arise and also improve the management of control in his business.