Abstract This paper summarizes and reviews "The Goal" by Goldratt and Cox. The paper discusses "Theory of Constraints", a philosophy for improving production throughput presented in "The Goal", and looks at the concept of throughput accounting, a concept embraced by Goldratt and Cox in "The Goal".
From the Paper "In The Goal, (Goldratt and Cox, 1986) Alex Rogo manages a troubled manufacturing plant. When his district manager informs Alex that profits must increase or the plant will be shut down, he turns to Jonah, a former professor. With Jonah's help, Alex turns the plant around while at the same time abandoning traditional management principles in favor of Jonah's Theory of Constraints and Throughput Accounting practices."
Abstract This paper explores the accounting malpractices within the Andersen Firm. The paper discusses the functions and duties of the firm and the history of the company. The writer describes recent events including the Enron case and a myriad of other cases, accusing Andersen of misleading investors. The paper also examines whether or not the Author Andersen auditing firm is a trustworthy firm to do business with.
From the Paper "Anderson contracted with the Enron Corporation to perform its audits and provide the audit opinion. The firm performed this task for over ten years and charged Enron almost $48 million in fees in the year 2000 alone. It is believed that Andersen hid the fact the Enron used questionable accounting practices to hide huge losses that Enron had incurred. Andersen has admitted that employees destroyed evidence that exposed the shotty accounting practices."
Abstract This paper examines activity based costing (ABC) which is an effective business management tool that will enhance and support a total quality management (TQM) environment. ABC analysis provides the information necessary to make business decisions such as determining if investments in efficiency initiatives, such as just in time (JIT), are warranted. When implementing ABC, management should use proven project management methodology to minimize the risk of failure. ABC is an effective total quality management tool, and supports just-in-time manufacturing methods in several companies as detailed in the paper.
From the Paper "After developing ABC in the 1980?s, Robin Cooper and Robert S. Kaplan have written extensively about its benefits (Shih-Jen & Holinda, p. 46). ABC is defined as a "costing system that identifies the various activities performed in a firm and uses multiple cost drivers"to assign overhead (or indirect costs) to products? (Siegel and Shim 2000, p. 15). ABC seeks to accumulate and allocate factory overhead costs to products (or services) by using focused drivers, such as, quality inspecting, moving, assembly, and matching (Warren, 2002, p. 328). Proponents of ABC cite many examples where cost accuracy is superior to traditional costing methods that use cost bases such as units produced, labor, or machine hours used (Warren, p. 421). "
Abstract Corporate greed and corruption has changed the face of American business forever. Corporate greed was the primary factor in the downfall of Enron, Global Crossing and MCI WorldCom. The paper shows that the governing bodies, the Securities and Exchange Commission, the Senate, NASD and other powers that be decided to act and in 2002, the Senate introduced the Sarbanes-Oxley Act of 2002. The paper describes how this new law impacts CPA?s, CPA firms auditing public firms, publicly traded firms and their employees, lawyers, brokers, dealers, investment bankers and financial analysts who work for or have as clients as publicly traded companies. The paper looks at the mission and purpose of the law and examines its affect on the accounting industry.
Table of Contents:
Abstract
Executive Summary
Introduction
Purpose and Mission
What it does
The Effect of Sarbanes Oxley on the Accounting Profession
New Rules, New Practices
From the Paper "In addition to the mandates outlined above, Sarbanes Oxley Act allows for additional provisions that seek to prevent conflicts of interests that can be a precursor to corporate corruption. The Act bans what is known as the "revolving door", prohibiting registered CPA firms from auditing any SEC registered client whose chief executive, CFO, controller or equivalent was on the audit team of the firm within the past year. This Act is crucial to help lessen the "you wash my back, and I"ll wash yours? mentality. Another significant rule calls for auditors to be rotated every 5 years. This way, no auditor can audit a client for more than five consecutive years."
Abstract This essay examines the fraud led by Enron's accountants that led to its recent bankruptcy. It studies the huge investigation into this fraud and analyzes some of its findings. It details the uncovering of several suspects that were connected to the biggest fraud in American history. It concludes that revisions must be made in order to prevent future frauds like these.
From the Paper "When the mighty giant, Enron, fell, it fell hard and resulted in the largest bankruptcy in American history. Worldwide focus then fell upon all who might have a possible answer for this event. Intense focus fell first upon Enron executives, and then, as the event evolved into what appears to be one of the most massive cases of corporate corruption ever known, others were brought into the spotlight.
"According to a statement published on the Andersen website, the primary corporate auditors of Enron, the organization was founded in 1913, when ?Arthur Andersen recruited the brightest students into his classes. Then, he turned them into "thoroughly trained accountants" who were able to go beyond the obvious in their work by using unique methodologies to improve financial performance.? It is, perhaps, those "unique methodologies" that took an unexpected turn at some point in the company's long and previously respected history, and then emerged as something uniquely ungoverned, unprincipled, and unconscionable. After the Securities and Exchange Commission began its in-depth investigation of Enron, focus then also fell upon Andersen."
Tags: Enron, United, States, Andersen, Bush, Administration, fraud, bankruptcy, accountant
This paper is a financial analysis of Wendy's International, using McDonald's Corporation, the industry leader in the fast food segment of the restaurant industry, as the benchmark firm.
Abstract This paper evaluates the financial position of Wendy's International Corporation, a fast food restaurant, by comparing it to the financial position of McDonald's Corporation. This author reports that Wendy's income performance, while strong, is substantially inferior to that of McDonald"s; and, in this area more than any other, Wendy's needs to improve if the corporation is to narrow the gap. This paper states that McDonald's has a substantially higher inventory turnover and holds less than half as many days in sales than does Wendy"s.
Table of Contents
Executive Summary
Financial Position
Income Performance
Short-Term Liquidity
Long-Term Solvency
Asset Management
Profitability
Market Value
List of Appendices
Common-Size Balance Sheets"McDonald's Corporation
Common-Size Balance Sheets"Wendy's International
Combined Common-Size & Base-Year Balance Sheets"McDonald's Corporation
Combined Common-Size & Base-Year Balance Sheets"Wendy's International
Common-Size Balance Sheet"Wendy's International With Baseline Comparison
Common-Size Income Statements"McDonald"s
Common-Size Income Statements"Wendy"s
Combined Common-Size & Base-Year Income Statements"McDonald"s
Combined Common-Size & Base-Year Income Statements"Wendy"s
Common-Size Income Statement"Wendy's With Baseline Comparison
Short-Term Liquidity Ratios"Wendy's With Baseline Comparison
Long-Term Solvency Ratios"Wendy's With Baseline Comparison
Asset Management Ratios"Wendy's With Baseline Comparison
Profitability Ratios"Wendy's With Baseline Comparison
Market Value Ratios"Wendy's With Baseline Comparison
Du Point Analysis"Wendy's 1998
From the Paper "With respect to short-term liquidity, Wendy's compares well in relation to McDonald's (refer to Appendix B-1). The reason for the Wendy's advantage lies in the corporation's decision to keep such a high proportion of assets in a current status. This strategy is not conducive to the most productive use of the corporation's assets.
"In relation to debt ratios, Wendy's is superior to McDonald's (refer to Appendix B-2). In this area, Wendy's also is superior to McDonald's in relation to interest coverage, as the corporation uses borrowing very little in comparison to McDonald?s."
Abstract This paper focuses on two large retailers in the area of retail home improvements, Lowes and Home Depot, and compares and contrasts their financial ratios in a five-year trend table along with the most recent industry averages. The information presented in this report can be used to help determine the over-all financial status of these two companies.
Financial Ratios Used
Home Depot
Lowes
Efficiency Ratio Analysis
Liquidity Ratio Analysis
Leverage Analysis
Profitability Analysis
From the Paper "The inventory turnover ratio shows how many times per year a business can turn-over its inventory. In other words, this number represents how many times the business sells out of its inventory in a given year. This ratio is calculated by taking the cost of goods sold and dividing it by the average amount of inventory the business carries. Notice that these ratios are determined by the cost of goods sold because the inventory figures are carried on the boots at cost, not the price the merchandise will eventually sell for (Brealey, pg. 142). When comparing Lowe's and Home Depot to the industry average, we see that both companies' ratios were 5.0 for the year 2003 and the industry average was 4.8. This means that for the year 2003, both Lowe's and Home Depot were able to turn over their inventory a bit faster than the industry as a whole. "
Abstract This paper examines the financial condition and performance of the Boeing Company, a publicly held company for the year 2001. Annual reports filed by Boeing in accordance with the General Accepted Accounting Principles and Securities and Exchange Commission regulations serve as primary data sources. Industry average financial ratios, outlook, and data are used to gauge Boeing's financial status. Recommendations are presented based upon analysis, generally accepted management practice and research.
From the Paper "The terrorist attacks on the World Trade Center caused a major negative economic effect throughout the United States and the world. Airlines were severely impacted do to a sudden and huge drop in passengers (Siegel, M., p. 551). Air travel has still not fully recovered from this catastrophic event. The resultant drop in commercial jet orders has hurt Boeing (Friedman, p 13). In the third quarter of 2001, Boeing experienced a 46% decrease in orders compared to 2000 (Friedman, p. 19). The commercial aircraft segment accounted for about 60% of Boeings revenues before September 11 (Standard & Poor's, 2002, p. 2). Deliveries for aircraft are expected to be 380 for 2002 vs.527 in 2001 (Siegel, M., p. 551). As reported in the 2001 Consolidated Statement of Operations, Boeing recorded a $935 million charge for "special charges due to events of September 11, 2001" (Boeing, p. 35). "
Tags: accounting, aerospace, aircraft, analysis, boeing, defense, financial, finanical, ratio
Abstract A review of "Ethics in Accounting" by Ireen Baset and how it addresses the contemporary ethical issues related to the accounting and financial decision-making process. Examines how the article treats the challenge, faced by employers, managers, administrators and employees alike, of adequately incorporating ethical values into the daily work schedule.
From the Paper "On the same account, a real estate company where the entire corporate dealings depend upon the efficiency and the sense of morality of the accountants must make relentless efforts to effectively communicate corporate ethics. This can be best done through the planning and implementation as well as the continuous maintenance of a sound and a pragmatic internal ethical program, that is putting down ethical rules in black and white for the organizational staff, employees and the first-line supervisors."
Abstract This paper is on "comparing and contrasting managerial and financial accounting". It also explains the differences in rules and regulations, management information and reporting requirements, and CMA and CPA licenses.
Abstract This paper reviews an article on the WorldCom scandal, and discusses how this article relates to 7-Eleven Inc. Also, based on the article, the paper discusses recommendations for improving accounting procedures at 7-Eleven, and explains the importance of ethics in accounting.
From the Paper "An article written by William Thomas and Thomas Morris discusses the Enron and WorlCom accounting scandals. In April of 2002, internal auditors discovered a $9 billion fraud. Unlike Enron, WorlCom has improperly reported capitalized expenses (Thomas and Morris). This was the largest amount of accounting fraud in U.S. history. Former CFO Scott Sullivan, who was the ?chief architect of the fraud,? pleads innocent to the original charges. Arthur Andersen was the accounting firm that was involved in both of these accounting scandals. This indiscretion caused the stock market to plummet, and many people lost thousands of dollars. Executives profited from this accounting fraud. The revelation of accounting fraud sent shockwaves through the investment community. Thousands of people lost much of their lives? savings in these accounting scandals. The devastation of this fraud caused President Bush to take a tough stance on corporate fraud."
Abstract This paper describes the history of the Enron Corp. and what led to its bankruptcy which the author sees as a product of management's greed, shady, yet legal accounting practices and a web of influence created through large campaign donations.
From the Paper "Enron created various types of contracts that protected both the buyers and sellers in case of price fluctuation over the length of the contracts. This new marketplace allowed energy users to predict and stabilize costs far into the future. This strategy created by Enron was based on the belief that it could be a big energy player without owning all of the power plants, ships and pipelines that most companies owned. Instead they would use contracts to control facilities in which other had invested. By 2001, Enron had evolved into a market maker for some 1,800 different products, many of them energy- or Internet-related contracts or derivatives the company had created itself.[i]"
Abstract This paper outlines a Wall Street Journal (WSJ) article about WorldCom's restatement of $7.2 billion in expenses and subsequent financial collapse. The basis of why the editors of the WSJ considered the story leading financial news is explored. Issues related to the study of finance include capital markets and institutions, investments, and financial management. Of particular interest are the financial management issues of accountability, financial statement accuracy, ethics, fraud and corporate responsibility.
From the Paper "The financial collapse of WorldCom occurs in the wake of the recent Enron financial scandal. The Wall Street Journal editors correctly categorize the WorldCom story as "leading the news" (Sandberg & Pulliam, 2002, A3). Attesting to the newsworthiness of the WorldCom story is the fact that this event is being covered in all major news outlets: print, radio, television, and on the web."
Abstract This paper provides some research into "Positive Accounting Theory" and how it impacts on the economy. The paper begins with an explanation of the theory itself and then offers some statistics and findings regarding the consequences of its use by management.
Contents:
Introduction
Explaining the Theory
Economic Cconsequences
The Development of Positive Accounting Theory
How Positive Accounting Theory Operates
Mnagament Decisions
Watts and Zimmerman
Research and Findings
An Example of a PAT study
Conclusion
From the Paper "Positive Accounting Theory and the doctrine of economic consequences helps us to understand why different firms choose different accounting policies, why some managers may object to changes in these policies and why investors may react to the potential impact of an accounting policy change. Accounting policy choices have economic consequences for the various constituencies of financial statement users and though complicating the setting of accounting standards, the source of the pressures driving the process can be explained by the development of a positive theory of the determination of accounting standards."
Abstract This paper begins with a brief explanation of the theoretic basics of budgeting and then proceeds with an analysis of the budgeting policies of the Atlantico Company. The paper concludes with recommended alterations for Atlantico's financial policy. Included at the beginning of this paper are different tables on Atlantico budgets, an income statement, and a balance sheet.
From the Paper "Another advantage budgeting is that is confers managers increased control on the business, based on variance analysis. Noticing unfavorable variances may trigger certain responses, which have the capacity to solve the already existing problems and to prevent future ones from appearing. For instance, if costs are too high, waste may be cut out or an expensive supplier might be changed. Should the sales be too low, a supplementary effort in advertising, promotion or sales could prove useful. If there is a problem with low production, the manager could look for bottlenecks in order to remove them or he/ she could try to raise labor efficiency."
