Just for Feet free essay sample

But turn to inventory turnover rate, the number was quite terrible for a retail company. Compare to average number of the industry which is around 2. 8-3. 2, JFF’s faced a serious difficulty on inventory turnover, which led to a potential risk in generating profit. Also the return on assets and equity were below the competitors in the market, and the time interest earned declined very fast during 1996-1998, means that the quality of financing activities was poor. * High-risk financial statement items: For 1998 audit, there were several factors should be carefully concerned. The first was the number of inventory. JFF’s inventory in 1998 consisting more than half of the company’s total assets, which was a high risk factor and need more efforts on physical confirmation and valuation. The second audit red flag was the negative cash flow. The common cash flow for a retail company should be positive and this is especially true for those large, well established ones. We will write a custom essay sample on Just for Feet or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page So JFF’s situation made it stand out in the industry, and the audit process should focus on this abnormal fact. Moreover, the dramatic increases in debt and the rising of accounts payable should also be considered and require extra audit attention. Q2. Identify internal control risks common to large, high-volume retail. How should these risks affect the audit planning decisions for such a client? Generally speaking, the most possible internal control risk to large, high-volume retail stores is that about inventory. How to count it and value it accurately is always the issue that auditors should concern most. The audit team should examine the company’s period physical count records and perform year-end inventory count by themselves to ensure the accuracy of inventory number. Also, another very important risk area that auditors should pay attention to is the cash accounts. The audit procedures designed to examine whether the financial figures are fairly stated should adjust to adapt to the specific company base on its overall business environment and operating characteristics. In addition, retail companies always adopt cost leadership strategy which minimizes operating expenses. This will result in inconsistency in policies because of decentralization and high employer turnover rate because of low human resource expense, and both these factors will accordingly increase risk of accounting errors or frauds. In order to issue opinion properly for a retail company, auditors should plan appropriate audit test focus on these high risk areas. Q3. Identify inherent risk factors common to businesses facing such competitive conditions. How should these risks affect the audit planning decisions for such a client? Intensively competitive business environment will increase the management’s pressure and thus increase the inherent audit risk of the company. In order to satisfy shareholders or investors, management maybe commit fraudulent financial reporting to cover the company’s worsened operation conditions. In this situation, audit planning should have certain procedures to test the opportunities whether management can commit fraud, such as inquiries of management and employers to establish an overall understanding of the client’s strategies and business, industry and economic environment and competitors’ situations. Also another risk factor that will increase the company’s inherent audit risk is the situation of its cash flow. If a retail company has a negative cash flow which means it not generating enough cash to maintain its operations, the risk of misstatement will accordingly increase. As stated in Q1, auditors should spend more efforts on examine the cash accounts if the cash flow of the company shows some abnormal signals. Q4. Identify the audit risk factors present for the 1998 audit. Rank 5 factors that were the most critical to the successful completion of that audit. Did Deloitte auditors responded appropriately to these factors? * Management pressure under highly competitive business environment. * Large inventory size (more than half of total assets) and low inventory turnover(less than half of the industry average). * Unusual financial reporting â€Å"treatments† such as vendor allowances and income control. * Continuing negative cash flow. * Drastic increase in overall debt during the past three years. * Decentralized business. * Low return on assets and equity. The audit risk factors stated above are in my opinion in descending order of importance to the 1998 audit of JFF. First, the management tone is always the critical aspect whether a company will or will not commit a fraudulent financial reporting. If the management is under high pressure in a highly competitive market at the same time has the opportunities to access inappropriate behaviors, it will result in high possibilities that this company conduct intentional misstatement or omission of adequate disclosure in financial statements. And in the JFF case, the unusual facts such as the low inventory turnover and continuing negative cash flow and dramatic increase in debt are also the areas should be pay enough attention to complete a successful audit. Always these unusual facts will increase the difficulties of the company’s operation sustainability, thus let to high risk of accounting fraud activities happening. To some extent, Deloitte auditors did try to complete professional audit for JFF and adopt several tests to finish this process properly, but on the other hand, they failed to respond enough to the dwindling cash and increased debt. They also failed to discover the fact that JFF’s business consistently grow despite of continuing negative operating cash flows in more than three years. These are all the unusual facts for a well-established and high profit retail company. So in my opinion, Deloitte auditors failed to respond appropriately to all possible audit risk factors, and thus led to their failure in the audit process of JFF. Q5. How would you have responded when being asked to send a false confirmation to Deloitte Touche? Before responding, identify the parties who will be affected by your decision. Commonly, all the parties that involved in the company’s business will be affected by booth income if it is false stated. Actually, this is an intentional manipulation of financial statement which will not be accepted under GAAP and related law. Shareholders, investors, vendors and suppliers, customers and company’s employees all will be affected if this false booth income was stated and thus led to certain punishment or penalty on JFF and ultimately caused the company went out of business. If I was in the position of Thomas Shine in this case, I would say no to Don-Allen Ruttenberg. This is simply because as an auditor, I should preform professionally and comply with AICPA Code of professional conduct. It is not allowed to make false financial statement confirmation when I was clearly know what is happening. This may cause some trouble to my career in the short term like I might lose this client or so, but I believe doing the right thing will ultimately benefit me in the long term career development.

Leadership Style Emotion

Leadership Style Emotion Article Summary The article on Leadership Style Emotion has broadly explored the impact of negative and positive organizational behaviors. According to the authors, all leaders aim at maximizing the ultimate performance of their workers in regards to achieving their organizational goals (McColl-Kennedy Anderson, 2002).Advertising We will write a custom critical writing sample on Leadership Style Emotion specifically for you for only $16.05 $11/page Learn More The leadership style administered is therefore very crucial for reaching and achieving the set goals. The authors assert that the transformational approach in leadership is more yielding compared to the transaction approach (McColl-Kennedy Anderson, 2002). They argue that the style of leadership used contributes greatly in the performance of the subordinate. Links Between Performance and Leadership Nonetheless, McColl-Kennedy Anderson (2002) are careful to note that leadership style cannot be the sol e determinant factor in regards to workers performance. Factors such as worker’s perception of their leader’s style in leadership greatly affect their performance (McColl-Kennedy Anderson, 2002). Workers feelings about their ability to perform with the type of leadership provided has a great influence on their willingness to perform their duties as the authors assert (McColl-Kennedy Anderson, 2002). The article shows the links between performance and leadership styles as well as the implications of an imbalance between the two. Organizational behavior is greatly influenced by the leadership in an organization. Workers respond positively or negatively in their performance due to the organizational leadership structure. Leadership structures may cause the workers to feel more closely attached to the organization or it can create a social distance that can be detrimental to the success of the organization. There are a number of models of organizational behavior, which i nclude, Autocrat, custodial, supportive, and collegial models.Advertising Looking for critical writing on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Leadership Models In the models mentioned above, each meets a certain need. For instance, the autocrat model meets the subsistence needs of the employees. The custodial model on the other hand provides the employer with security and benefits. These two models according to research have been proven to have a minimal performance response. The supportive model as well as the collegiate model both focuses on encouraging the workers hence enhancing their performance. However, with the four models above, not many organizations operate with one exclusively without engaging at least an extra model. Managerial leadership that supports teamwork encourages employees to be responsible and demonstrate friendly relations will fellow colleagues (Roman Boyce, 2001). This posi tive organizational behavior can contribute greatly in achieving organizational goals. If for instance the management could consider investing in their employees through training, the performance of the organization would increase. Case Study, Hypothesis The management in a particular company decided to hold a training program aimed at improving workers knowledge on the market needs. They decided to offer training free of charge to their employees. Other employees also attended the seminar from different organization but they had to pay. Almost 90% of the employees of the organizing company attended the seminar, which was designed to improve their skills and productivity in the industry (Gilbreath Harris, 2002). A few months later after the conference, there were notable changes in the organization in terms of workers’ interaction as well as financial growth. The performance of the company went up.Advertising We will write a custom critical writing sample on Leadersh ip Style Emotion specifically for you for only $16.05 $11/page Learn More The company’s workforce became more free and interacted more efficiently with each other and a friendly culture was developed within the organization. The training helped the workers to have closer relations and work as a team. Best Leadership Models Leadership that focuses on the employees is more often successful compared to one that does not (Geller, 2001). Applying such leadership models that focus on the employees’ welfare such as the supportive and the collegial models, workers performance improves. This is partly due to a feeling of belonging and being part of the company. A company that supports and pays more attention to employees’ prerequisites benefits from greater loyalty compared to one that does not. With workers feeling as part of the company, their performance will definitely improve positively. Quality of Work Life, QWL and Its Effects For best performanc e among the workers, a leader must be keen to address the organization’s Quality of Work Life, QWL from time to time (Abernathy, 2001). Quality of Work Life refers to the favorable or the unfavorable working conditions in an organization. Leaders are tasked with the responsibility to ensure that the working environment is perfect and that it can allow effective and maximum productivity. According to McColl-Kennedy Anderson (2002), working conditions greatly influence the emotional buildup of workers. The authors indicate that both the leaders and the subordinates may have some negative or positive feelings depending on the working conditions they are subjected to (McColl-Kennedy Anderson, 2002). Conclusion The article therefore has outlined the ways through which leadership in organizations can influence the organizational behavior. According to the authors, subordinates respond positively or negatively to the leadership style that is in place.Advertising Looking for critical writing on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This means that before engaging a leadership model it is critical to analyze its impact on the organizational culture. A leadership style that contradicts workers culture will be rejected hence escalate negative emotions. As the authors have indicated, I agree that leadership styles have great impacts on organizational behavior. References Abernathy, B. (2001). Focused vs. Consolidated Measures in Performance Pay Systems. The Behavior Analyst Today, 3 (1), 7–12. Geller, S. (2001). Behavioral Safety: Meeting the Challenge of Making a Large-Scale Difference. The Behavior Analyst Today, 2 (2), 64–75. Gilbreath Harris (2002) Performance-Based Pay in the Workplace: Magic Potion or Malevolent Poison? The Behavior Analyst Today, 3 (3), 311–316. McColl-Kennedya, J., Anderson, R. (2002). Impact of leadership style and emotions On subordinate performance. The Leadership Quarterly, 1 (1) 545–559. Roman, H.R. Boyce, T.E. (2001). Institutionalizing Behavior-Based S afety: Theories, Concepts, and Practical Suggestions. The Behavior Analyst Today, 3 (1), 76–82.