Ibm Risk Analysis
Relative Size in the Industry IBM is part of the technology sectors in the diversified computer systems industry (IBM: Summary for International Business Machines- Yahoo! Finance). The market cap is 254 billion with IBM making up 218.6 billion. IBM is the largest company relative to the diversified computer systems industry. In a less specific industry of computers IBM only trails Microsoft Corporation by 12 billion dollars ("International Business Machines Corp."). Because of IBM’s large size relative to its industry the relative size does not pose a large business risk to IBM because they can leverage their large market share, capabilities, and achieve economies of scales.
Acceptable audit risk is affected by the relative size of IBM in the industry it operates. IBM is a large global corporation and thus there are a very large number of financial statement users. The large number of financial statement users causes the auditors to set acceptable audit risk at a lower number and thus lowering planned detection risk and increasing the amount of evidence that must be accumulated.
Major Competitors IBM’s major competitors in the diversified computer systems industry are Hewlett Packard Company Common, Teradata Corporation, Cray Inc., and Silicon Graphics International (IBM: Summary for International Business Machines- Yahoo! Finance). These competitors do not pose a large risk to IBM because they have much smaller market-shares than IBM Hewlett Packard Company Common IBM’s closest competitor only has a market capitalization of 24.4 billion and the next closes which is Teradata Corporation only has a market cap of 10.5 billion (IBM: Summary for International Business Machines- Yahoo! Finance). In the computer industry IBM’s major competitors are Microsoft, Apple, Oracle, Cisco Systems, and Intel Corporation ("International Business Machines Corp.") IBM due to operating in over 170 different countries in multiple different industry segments and
Acceptable audit risk is affected by the relative size of IBM in the industry it operates. IBM is a large global corporation and thus there are a very large number of financial statement users. The large number of financial statement users causes the auditors to set acceptable audit risk at a lower number and thus lowering planned detection risk and increasing the amount of evidence that must be accumulated.
Major Competitors IBM’s major competitors in the diversified computer systems industry are Hewlett Packard Company Common, Teradata Corporation, Cray Inc., and Silicon Graphics International (IBM: Summary for International Business Machines- Yahoo! Finance). These competitors do not pose a large risk to IBM because they have much smaller market-shares than IBM Hewlett Packard Company Common IBM’s closest competitor only has a market capitalization of 24.4 billion and the next closes which is Teradata Corporation only has a market cap of 10.5 billion (IBM: Summary for International Business Machines- Yahoo! Finance). In the computer industry IBM’s major competitors are Microsoft, Apple, Oracle, Cisco Systems, and Intel Corporation ("International Business Machines Corp.") IBM due to operating in over 170 different countries in multiple different industry segments and