The case analysis of Equity Funding Introduction The collapse of Equity Funding had a far-reaching influence on business practices and institutions. Although it happened over 30 years ago‚ the lessons from Equity Funding are still meaningful and constructive nowadays. Auditors of Equity Funding failed to collect sufficient evidence‚ check internal control and substantiate computer system. The audit premise----- understanding internal control system AUS 402.41 requires the auditor to obtain
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finance: equity or debt. Both methods have advantages and disadvantages and the business must make a decision on the method to embrace depending on it’s long term objectives and the level of control the management desires to maintain. INTRODUCTION A business needs capital to be able to run its day to day activities. There are various sources of financing for businesses‚ whether it is for start up of for expanding. But before a business chooses a source of funding‚ the following
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(a) “Nemawashi” is an agricultural metaphor. The idea is that before a farmer plants a seed‚ he should prepare the roots and the soil‚ so that the seed has the best chance of survival. It is a political process by which an unofficial understanding is reached before a final decision is made on a particular matter. “Nemawashi” is Bottom-up style decision making (middle management has the greatest influence on decision making). The Japanese are primarily concerned with harmoniously working out problems
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Private Equity Funding in India – Issues and Challenges Swati chauhan Swati.chauhan09@gmail.com Krishna business school kanpur 1. Introduction India is the largest democracy in the world. Its main strength is availability of abundant skilled and cheap manpower. The country has been on growth trajectory in all fields as a planned economy thus becoming a safe and attractive destination for foreign investment. Currently‚ in terms of Purchase Power Parity‚ it is the fourth largest economy
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Chapter 5 Case -- Stem Corporation (A)* On December 31‚ 2006‚ before the yearly financial statements were prepared‚ the controller of the Stem Corporation reviewed certain transactions that affected accounts receivable and the allowance for doubtful accounts. The controller first examined the December 31‚ 2005‚ balance sheet (Exhibit 1). A subsequent review of the year’s transactions applicable to accounts receivable revealed the items listed below: 1. Sales on account during 2006 amounted to $9
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Case 10-5 Danle Corporation In November 2008‚ Danle Corporation，a public company engaging in the design‚ development‚ manufacture‚ and assembly of motors，was sued because of safety issue of parts it manufactured. Danle made no disclosure of the lawsuit in Form 10-K since it determined that the risk of potential loss was remote and no amount of potential damages could be reasonably estimated. In October 2009‚ Danle was served a second complaint for the same reason. Danle’s external counsel believed
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What should the controller of Lexsteel do in order to address the potential problems within the corporation? • The controller became aware of the potential problems with the accounts payable system because of the discussion made with the external auditors. • Each branch manager is given the authority to order materials and issue emergency purchase orders directly to the vendors. • Physical counts of raw materials are not performed since there is a cost-effective computerized perpetual inventory
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reinforces does Salatino use to motivate his sales people? Salatino uses every ones favorite reinforcements‚ money! Money is considered a secondary motivator because its not considered a basic human need. Saltaino uses commissions ranging between 5% and 12% as an incentive motivate his employees to make sales. This secondary motivator is a positive motivator because money is why people have jobs and careers. 2. What kind of reinforcement schedule is used by Great Northern American to pay
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Lee Corporation Equity Scenario • Review the following information: Lee Corporation‚ a U.S. company‚ began operations on January 1‚ 2004. During its first 3 years of operations‚ Lee reported net income and declared dividends as follows. Net income Dividends declared 2004 $ 40‚000 $ –0– 2005 125‚000
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Case Summary Digital Semiconductor was a business unit of Digital Equipment Corporation. John Gavin‚ the DS group controller‚ wanted the finance department to find ways to add value and better support the division because the DS business strategy had many changes over the past five years and the division was still operating at a loss. History: The semiconductor division which was a part of Digital Equipment Corporation expanded rapidly in the 1970s. Digital was financially very successful in 1988
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