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The amount of data companies can obtain and store aboutcustomers has grown substantially over time. what do you see as theethical issues related to customer data storage anduse? Do you think the issues you have identified arerelated only to online businesses or to all businesses? Shoulddifferent types of organizations be required to store more or lessdata or should they all have the same set of rules for datastorage?

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Trinidad Tremblay
Trinidad TremblayLv2
28 Sep 2019

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The company the team chose is Alphabet formally Google, and competitor is Yahoo

You are a senior manager for the highly successful regional CPA firm of Fine, Dee, Evah, Dense, LLP (Fine). Since its inception nearly 30 years ago, Fine's audit practice has exclusively consisted of auditing private and not-for-profit organizations. Recently, the partners have been considering an opportunity to audit a publically-traded company for the company your team has selected.

The primary reason Fine has not heretofore ventured into auditing public-traded companies is because of the potential risk and legal liability associated with auditing public companies. However, Fine has been a bit stagnant, business-wise, for the past few years, and some of the older and more risk adverse partners are beginning to retire. Consequently, the lure of the often-lucrative and prestigious opportunity to audit a public company has become to hard to resist, so the partners have decided to pursue the chance to audit this company.

On a beautiful early-september morning you are called into the senior partner's office and told you and your team have been selected to lead the first-ever effort to audit a public-traded company for Fine. You are honored, but also know auditing a public company is a bit more tricky and complicated than auditing private and not-for-profit organizations. Fortunately, the senior partner had considerable experience early in his career with another firm in auditing public companies and told you he would be with you all the way. Relieved, you asked him what he wanted you to do. He tossed you the most recent Form 10-K of the company you selected and gave you the following assignments:

Review and discuss the Form 10-K for the company you have selected.
Create a report that will have 4 Sections.

Section 1. Initial Risk Assessment

Hint: The business and risk information is usually found in the first part of the risks, do not simply restate what is in the Form 10-K. Think like a senior manager at a CPA firm-what accounts (cash, A/R, Inventory,etc.) might be the most potentially risky and Why? For example an airline might not have the same inventory considerations found with a retail outlet like Wal-Mart.

Describe the following issues:
Ethics and legal Issues

1. The ETHICS and sophistication of top management and cultures where the company operates.

2. Have there been significant auditing or accounting issues raised in the recent past?

3. Did they have disputes with their previous audit firm?
4. IS this company or industry particularly susceptible to lawsuits or other legal proceedings?

Evaluate the regulatory and compliance and requirements of this company.
1. The compliance requirements of this company.

2. is it subject to a high-level of governmental regulation?

3. Are employees unionized? Are they generally compliant with Sarbanes-Oxley and other regulatory rules?

Section 2. Analytical Procedures

Based on Table 8-1 Examples of Planning Analytical Procedures and the sections on Analytical Procedures, select three ratios ( current, ratio, Inventory turnover, debt to equity, return on assets). calculate these ratios for the most recent year and compare the results.

Write a 350 to 525 word analysis of your findings

Section 3. Materiality and Risk

The senior partner wants to confirm your understanding of key concept.
Summarize each concept 90 to 175 words each.

materiality
misstatement
audit risk
audit risk model
inherent risk.
relationship of risk to audit evidence

Reply to this students discussion post with remarks and commentsto what has been stated below:

what do you think of the “free” offers used by online retailersor marketer? Do you think the “free” offers would be more effectivethan coupons?

One thing that I am sure about, NOTHING is free. Free inadvertising and marketing is every effective at creating a buzz andthe urgency to buy.

Coupons are effective as well. Companies rely on ‘breakage’ whendealing with coupons. Not everyone will use a coupon to purchase aproduct, but the message is still received when someone sees acoupon, that the item or brand is on sale.

The article was interesting and hit home – I am a spender, mywife is a shopper. We can not go to the store together – EVER – wehave different motivating factors when buying a product.

Coupons and FREE try to invoke the same buying sense indifferent types of people. Buyers, shoppers, savers, all have theirjustifications on making a purchase – and all are legitimate – noneare right or wrong. I don’t see that Free are better than couponsas they appeal to different types of shoppers. My wife will jump onfree, but I am more conservative and realize that nothing is free.Companies can’t survive by offering free product. Free is amarketing term used to get someone to use a product, but the freeis built into the cost of the product or another product. I workfor a manufacturing company that periodically offers ‘free’ productas a promotion. The free product has a cost associated with it andit is absorbed elsewhere. For example, a product is free if you buyanother product. Famous Footwear offers by two get one free. Thatis really 33% off. Free is more effective, many times, thanoffering a coupon for 33% off. But the company is also moving 3pairs of shoes which helps get inventory off the shelf.

Please read and share your thoughts on this recent brief article from the Journal of Accountancy on accountant skills needed for success in a tech-enabled future. Do you agree? Can you think of other skills that future accountants will need?

JOFA Article: (https://www.journalofaccountancy.com/issues/2018/jun/technology-skills-for-accountants.html)

"Many experts expect accountants' work and duties to change fundamentally in the coming years. As technology is developed to handle tasks that accountants traditionally have performed, CPAs' attention is likely to shift toward advisory roles, investigating exceptions and anomalies identified by technology, and developing processes and controls that will enable technology to perform certain necessary tasks. The technology will allow for a more complete audit that uses all available data rather than samples. And the scrutinizing of anomalies will provide opportunities for auditors to provide more useful information to clients.

Here are some of the skills CPAs will need to succeed in these new duties:

Understand how processes work. Even the most well-designed technological solutions are useless if they are not set up properly and monitored to determine whether they are performing effectively. Advising and consulting on business process improvements also will be a promising niche for CPAs in the future.

Communicate effectively with technologists. Successful CPAs who understand processes likely will not have the technological skills to code and implement systems. Technology experts, meanwhile, are unlikely to understand accounting and auditing rules and the deliverables required from systems. CPAs will need to be able to team with technologists and describe the decision trees that must be embedded in the technology to process the correct data and deliver the desired intelligence.

Learn to advise or consult, not command. Accountants are used to providing rule-based, definitive answers about making appropriate journal entries, information to be included in footnotes, and whether financial statements are materially misstated. But as accountants take on more advisory and consulting duties, they will need to learn how to provide opinions and advocate for their ideas without being overbearing.

Analyze data and communicate with clients. As technology results in the automation of more compliance-based services, accountants will have more time to spend with clients. To make the most of this time, accountants will need to learn how to analyze data for business insights and then be able to communicate those insights to clients."

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