Case 4: The Audit
Conduct a strategic analysis using the Executive Summary template. Prepare and submit a three-page executive summary that discusses what strategic alternatives are available and provide a recommended strategy.
You are to work alone to analyze and prepare the Executive Summary for the case. NOTE: Click “Submit Assignment” in the upper right-hand corner of your screen to turn in your Executive Summary no later than Sunday, midnight CT. Name your file with your name and the unit number, i.e. Jones1 or Brown1. Your file should be in either Microsoft word ( or x) or rich text (.rtf) format.
The following information will be required for the Executive Summary.
TEXTBOOK CASE ANALYSIS GUIDANCE(CAG)
and the
TEXTBOOK BUSINESS CASE ANALYSIS EXECUTIVE SUMMARY TEMPLATE
These files are required for the unit textbook case studies.
Synopsis of the Case: The content of the synopsis should present relevant background facts about the case under examination.
Relevant Factual Information about the Problem or Decision the Organization Faced: State the precise problem or decision the organization faced. The section should include information that addressed the business issue under examination. This section should be no longer than a single paragraph.
Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials: This section should be the bulk of your paper. Analysis of the business problem or decision in light of the course concepts must be presented, as well as the business lesson another organization could learn from this situation. Besides citation to the text, learners must conduct research in the University library related to the top. Citing the textbook only is not enough to demonstrate you understand and can apply the course objectives. Here is where comparative and contrasting positions should be considered and examples and illustrations provided.
Recommendations: Provide logical recommendations to address the business lesson identified above. The recommendations need not to be specific to the organization examined, but should consider how other organizations, if similarly situated, could lessen the impact of the problem or decision identified. Recall, that the organization under examination has already moved pasted this problem so any recommendations made, at this point, are fruitless. The focus of this section should be on what other companies should be aware of to address similar problems or decisions. Citation to the textbook alone is insufficient for analysis in this section. Learners should conduct research in the University’s library to support their positions. Depth of scholarship is not demonstrated by providing personal opinions alone, but by using examples, analogies, comparison and illustrations from the academic literature. Not only does this synthesize the material to assist the reader’s understanding, it is an effective way to present the academic sources and extend the discussion of your ideas. This section should be a paragraph or two.
Alternative Recommendations: This section is not a continuation of the prior. Provide suggestions for how to avoid the problem or decision the examined organization faced. Analysis here should be may be forward- thinking, predictive or, most likely, preventative in nature but tied to the thesis statement. Again, opinion is insufficient to provide the required academic analysis. Sources, other than the text, must be provided to sustain the statements made. This section should be a paragraph, at most.
Conclusion: End the assignment with a summary of the important points made in the document. No new information may be presented. Writing a conclusion can be done by rewording the opening or reformulation the topic sentences of each paragraph to make a summary for the reader. This section should be a paragraph, at most.
TEXTBOOK SEQ CHAPTER \h \r
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CASE ANALYSIS GUIDANCE (CAG)
TO BEGIN, PLEASE PRINT THIS FORM FOR REFERENCE
This supplement to the syllabus is provided to assist you;
HOWEVER
, it is also a directive on how to adequately accomplish a case analysis. The case format guidelines
MUST
be followed.
CRITICAL THINKING AND ANALYSIS – As a business/management major, or other major for that matter, and soon to be college graduate, one of the most important skills/abilities you should possess is the ability to engage in critical thinking and analysis (using the skills and knowledge you have learned throughout your education and applying them). You will never have everything presented to you when you are a junior manager/executive, but you are expected to take what you have and use your knowledge and skills to make decisions and to arrive at valid and accurate conclusions, which may and should include “thinking outside the box”.
To those who think you may have some problems, here are some suggestions and guidance to aid you in your case study preparation:
______________________________________________________________________
The information provided below is designed to assist you in case analysis.
Don’t make anything up; just take information from the case and the time frame of when the case was written. You are required to use problem solving and critical thinking skills in this analysis. If something isn’t specifically stated, then consider the likelihood of it being a possibility for this given firm considering the timeframe that the case is taking place in, and the type of industry that the firm operates in.
Also,
DO NOT
go on the Internet and look at where the firm is today. The only information about the company that I want you to use in your case analysis is what is contained in the textbook or in any approved outside sources specifically listed.
a. The case analysis will be based on the time frame of the case. For example, if the case was written in
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006, then students will use information from 2006 or earlier publications.
b. Students
will use
for references other sources of information as well as the textbook. These sources should include business magazines and professional journals. Online sites such as Wikipedia, Portable MBA, Quick MBA are not acceptable references for case analysis in this course.
c. Students should use any of the following magazines and publications as references:
Barron’s, Business Week, Fast Company, Forbes, Fortune, Harvard Business Review, Wall Street Journal. However, these aren’t the only outside sources that might be applicable, so don’t limit yourself to just these few. Using Google or other Search Engines can certainly assist you. For assistance in how to locate articles in the above publications, email and/or call the Park Library, toll free at (800) 270-4347.
d. Make sure that you cite and reference the Case Authors, and NOT the Textbook authors when giving credit for information obtained from the case.
CASE ANALYSIS TOOLS
Use the tools listed in the textbook for your analysis.
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Case 4 The Audit
Gamewell D. Gantt, George A. Johnson, and John A. Kilpatrick
Sue was puzzled as to what course of action to take. She had recently started her job with a national CPA firm, and she was already confronted with a problem that could affect her future with the firm. On an audit, she encountered a client who had been treating payments to a large number, but by no means a majority, of its workers as payments to independent contractors. This practice saves the client the payroll taxes that would otherwise be due on the payments if the workers were classified as employees. In Sue’s judgment, this was improper as well as illegal and should have been noted in the audit. She raised the issue with John, the senior accountant to whom she reported. He thought it was a possible problem but did not seem willing to do anything about it. He encouraged her to talk to the partner in charge if she didn’t feel satisfied.
She thought about the problem for a considerable time before approaching the partner in charge. The ongoing professional education classes she had received from her employer emphasized the ethical responsibilities that she had as a CPA and the fact that her firm endorsed adherence to high ethical standards. This finally swayed her to pursue the issue with the partner in charge of the audit. The visit was most unsatisfactory. Paul, the partner, virtually confirmed her initial reaction that the practice was wrong, but he said that many other companies in the industry follow such a practice. He went on to say that if an issue was made of it, Sue would lose the account, and he was not about to take such action. She came away from the meeting with the distinct feeling that had she chosen to pursue the issue, she would have created an enemy.
Sue still felt disturbed and decided to discuss the problem with some of her co-workers. She approached Bill and Mike, both of whom had been working for the firm for a couple of years. They were familiar with the problem because they had encountered the same issue when doing the audit the previous year. They expressed considerable concern that if she went over the head of the partner in charge of the audit, they could be in big trouble since they had failed to question the practice during the previous audit. They said that they realized it was probably wrong, but they went ahead because it had been ignored in previous years, and they knew their supervisor wanted them to ignore it again this year. They didn’t want to cause problems. They encouraged Sue to be a “team player” and drop the issue.
This case was prepared by Professors John A. Kilpatrick, Gamewell D. Gantt, and George A. Johnson of the College of Business, Idaho State University. The names of the organization, individual, location, and/or financial information have been disguised to preserve the organization’s desire for anonymity. This case was edited for the SMBP–9th, 10th, 11th, 12th, 13th, 14th and 15th Editions. Presented to and accepted by the Society for Case Research. All rights reserved to the authors and the SCR. Copyright © 1995 by John A. Kilpatrick, Gamewell D. Gantt, and George A. Johnson. This case may not be reproduced without written permission of the copyright holders. Reprinted by permission.