While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line. For a manager to evaluate the impact of marketing they will need view the current marketing expenditures, sales, and profits to make a conscious decision on what methods are working. While I think placing marketing as an investment is a good concept, determining the value is too biased without a common measurement between all companies in a similar industry. Without understanding the current value of marketing, the marketing budget will be one of the first items cut when the business is in a downturn. Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past.
From this perspective, the role of government intervention may arguably be indispensible. When a domestic economy suffers a market failure, it becomes the job of government to intervene through such measures as taxation or the introduction of regulatory measures into a particular market. However, if government’s intervention is too heavy handed, then the allocation of efficiency in that particular market may be worsened rather than corrected. This is what is known as government failure. This essay will therefore present a discussion on which is the lesser of the two evils; market failure versus government failure.
With these aspects in mind, the authors offer recommendations that would limit the effects of biases including full divestiture of consulting and tax services, prohibit auditors from taking positions with the firms they audit, removing the threat of being fired, and educate auditors so they understand how and why biases effect their decisions. I found the study conducted by Cain et al. on the effects of disclosing conflict of interest very fascinating. I was surprised that disclosure of the advisors motive to mislead the estimators did not cause the estimators to substantially discount their advisor’s advice. I would think that disclosing the advisors motives would have a greater impact on the estimator’s decision.
International investors will see the deprivatization movement as a risk to not succeed when making investments in the country. The chances of potential losses in a unstable market might affect their decisions about moving forward and investing on the country or not. Without security on property most likely less international investments will be made. 3) Do you think that mass deprivatization is in the long-run best interests of Russia? In my opinion deprivatization will slow down potential growth of the country since short-term and long-term investments will be affected by the uncertainty of property rights security.
PART IV CASE SOLUTIONS CASE 2-1 JOHNSON TOY COMPANY Question 1: From the standpoint of an individual concerned with accounting controls, discuss and evaluate Johnson Toy Company’s present policies for handling returned items. The controls are poor from the standpoint of accuracy of financial records, because they provide poor information to management. Question 2: Answer question 1, but from the standpoint of an individual interested in marketing. Marketing people tend to favor less stringent controls in the sense that they provide more flexibility when bargaining with retailers. Question 3: Propose a policy for handling returns that should be adopted by the Johnson Toy Company.
(INTRO) One of key accounting activities this WorldCom case points out is how WorldCom capitalized leased lines which brought little or no value to the organization, but were accounted as capitalized assets, and the impact this can have on external users. “To maintain and broaden public confidence, members should perform all responsibilities with highest sense of integrity.” (AICPA.com) By capitalizing the costs of these leased lines instead of it would have shown a significantly lower net value of the company. It would have negatively affected cash flows and all the ratios. This activity certainly discredits the profession. It does not offer the fullest disclosure, objectivity, and transparency.
Part I: I believe Susan bond has two options, first is to ignore the ethical implications at Empire Globe Corporation and proceed with further negotiations with Power authority while helping Treadstone maximizing profits. And the second is to reveal the truth without becoming a sacrificial lamb (that seems to be her inherent nature, as it sprouts from her family background) for the false alarm by Treadstone about inefficiency in the Feldport operations to Feldportians. If I was in Susan’s position, at this point when I know Treadstone and James are not going to reveal truth to all the stakeholders for sure, I will file a complaint about the manipulated advancements by Treadstone to the public of Feldport and the authorities. Treadstone was playing under the law and Feldportians were willing to make any special arrangements to attract Empire globe back to the Feldport, therefore he might have been successful in his plans, however for me, taking advantage of someone while showing a miser image is ethically incorrect and has to be escalated to party adversely affected, immediately. So far, I believe Susan is on right track; in this case her personal belief about being reasonable to all the stakeholders is the foundation of her ethical beliefs.
Pocketing the difference between price tag, ongoing promotion and cash sales. * Involuntary rotation might not be good for the moral of the employees, lowering their loyalty and increasing their turnover * Lack of charismatic leadership: * Branch managers have no close relationship with their corporate superiors. * Performance evaluation is based on lowering theft percentage, not personal goals to achieve. Those factors result in poor perceived organizational support (OB, p. 110). This perception has a direct effect on employees’ engagement and organizational citizenship behavior towards the goals of the company.
Also, the movie focuses on the ethical dilemma, whether the company should (or not) sacrifice long-term goals for short-term profits. According to the GTX’ executives, sharply cutting expenditures - by downsizing and redundancies - was necessary in order to push up the stock price and avoid upcoming aggressive acquisition by the competitors. But the question is how in real life investors perceive large layoffs? According to Gunther Capelle-Blancard and Delia Tatu – there is no distinct correlation and investors are likely to do the opposite of the board’s expectations: “Layoff decision can be associated with both positive and negative stock market reaction. The perception of investors is determined by the information incorporated in the announcement itself and in firm specific characteristic, but also by economic conjuncture” The next reason of the board’s decisions lays in the fact that the GTX was prioritizing the relationships with stockholders, neglecting the other stakeholders at the same time.
They worked with the RIAs (registered investment advisors) to lower the cost. They ruled out those that did not match the efficient market theory, avoiding purchase stocks in the open market (use block trade) or near announcement date. These are the two examples of avoiding big price changes caused by large purchase or event risk. 2. DFA roughly believed in efficient market theory.