Nike with apple Essay Example for Free

Nike with apple Essay To bring inspiration and innovation to every athlete* in the world. *If you have a body, you are an athlete. Guiding principles (11 Maxims) They guide employees at all levels as they complete their work at Nike and represent the Nike corporation globally. †¢It is our nature to innovate. †¢Nike is a company. †¢Nike is a brand. †¢Simplify and go. †¢The consumer decides. †¢Be a sponge. †¢Evolve immediately. †¢Do the right thing. †¢Master the fundamentals. †¢We are on the offense – always. †¢Remember the man. The late Bill Bowerman, Nike co-founder) Manager Manifesto -It is a set of Core Principles that describe how Nike managers lead with excellence * Lead * Coach * Drive * Inspire Objectives: * Protect and improve Nike’s position as the number one athletic brand in America. * Build a strong momentum in growing fitness market. * Intensify the company’s effort to develop products that women need and want. Explore the market for products specifically designed for the requirements of maturing Americans. Direct and manage the company’s international business as it continues to develop. * Continue the drive for increased margins through proper inventory management and fewer better products. Competencies: Innovations: 1. Design your own shoes: Customers can choose their own colors and mascots to create shoes which define their personality 2. Nike self lacing automatic shoes: The automatic lacing system provides a set of straps that can be automatically opened and closed to switch between a loosened and tightened position. 3. Nike with apple: The NIKE+ package consists of a pair of specially designed NIKE+ running shoes, an ipod nano, and a NIKE+ ipod sport kit. As a person runs, ipod tells the distance, pace, and calories burned via voice feedback that adjusts music volume as it plays. Goal: World’s leading sports products and equipment provider. Business strategies: Encompasses the business’s overall positioning in the sports industry and stay competitive due to the product differentiation and globalization. Competitive Advantage: Brand Name, Product Quality, Inventory turnover, Cost leadership, Effective in-store operations.

Case Study Ikea Invades America Marketing Essay

Case Study Ikea Invades America Marketing Essay IKEA has successfully grown in the home furnishings retail market as a result of its primary philosophy of cost-leadership, wide variety of fashionable and practical products, and its ability to maintain low costs and pass the savings onto the customer. In addition to this, IKEA has also implemented some very important details into their overall corporate strategy that affects the shopping experience of the customer. They have reinforced their chic-style and sophisticated environment by offering gourmet meals in their stores (offering smoked salmon and other Swedish delicacies), implementing the availability of a child day-care area rendering adults free to shop, and by focusing on self-service shopping/self-guided tours through fully furnished staging areas. In addition to the experience that customers regard as convenient and even fun, IKEA can attribute the success of their organization to their very well balanced corporate strategy. They follow a specific process that allows them to design and contract the manufacturing of medium to high quality (relative to price) home furnishings and also permits the unique shipping, distribution, display and final point of sale of these products in a very methodical manner. The overall success of the company comes from its strategy to produce attractive yet simplistic designs that are made from inexpensive yet reasonably well-constructed components. These unfinished products are then shipped in a disassembled fashion (flat-packed), sold directly to the customer in a warehouse type store, and then taken by the customer to their home where the final assembly takes place all in return for a price that is 30-50% less expensive than competitors. What do you think of the companys product strategy and product range? For the limited niche market that IKEA operates within, the companys product line is substantially larger than any of its competitors. This could come as a result of the flexibility of its products designs. A single product such as a table or a bookshelf can be selected and purchased as a component of a larger set or as an individual product, however due to the interchangeable nature of the product lines, it could also be implemented in a way that complements another set of furnishings from a different design set. This advantage allows for the minimization of design costs. The advantages of the product strategy are clear increased cost savings that are translated into lower prices for the customer, while still marketing your brand as a fashionable option for home furnishings Low Price with Meaning. IKEA provides the customer with the freedom to select their own furnishings, designs, and combinations while providing them with as much assistance as they can to streamline the purchasi ng process. From the showroom examples that display fully furnished home scenarios to the availability of user-centered items such as tape-measures and vehicle cargo racks, IKEA is implementing its self-service (for customers) philosophy. Another advantage of the product strategy comes from the understanding that is inherent between the customer and the manufacturer the costs are lower because they are simplistic, medium quality, convenience designs where assembly is required without exception. This flat-packed strategy saves on construction and shipping space. The arrangement is dual-benefit since the consumer can see the savings of self-assembly. This balance between quality, product line and price comes about through a very closely monitored process. The disadvantages of the product strategy and the product range are fairly evident as well. The idea of the transient use of medium-quality, self-constructed, Scandinavian-styled furniture naturally eliminates a large portion of the population as a target market for the products. Either the total combination of these details or each of them individually potentially causes concern among certain consumer demographics. The niche market in which IKEA resides does not prov ide a sizeable product line for those that are not looking for the overall type of furniture that they provide. In addition to this, the western mentality regarding home furnishings is one that IKEA hesitated in reacting to. It conducted market research and found that its product line was not aligned with traditional demand, especially due to the reluctance of Americans to adopt a Scandinavian style of home furnishings. Despite its success, there are many downsides to shopping at IKEA. What are some of these downsides? IKEAs Vision Statement (in Figure C of the case) describes how the company seeks to build a partnership with its customers. What do you think of this vision statement? The disadvantages of shopping at IKEA are almost as intrinsic to the environment as the advantages. Due to the sheer size and layout of the stores, the ability for consumers to quickly locate and select a small number of products and vacate the premises is very difficult. It seems that to keep a timely and efficient traffic flow the second level of the store is designed along a path that leads the consumers through a display of all the different product lines throughout the separate segments (kitchen, bath, bedroom, etc.) In order for a consumer to locate the product they are seeking, they may experience some difficulty navigating through IKEAs 10,000 other products. In addition to this, the scarcity of store locations limits the ability of the consumer who is ordering from a catalog to physically experience the product prior to purchase and delivery. The vision statement is logical in its delivery, but potentially flawed in its practicality and how it pertains to IKEA. First and foremost, the company states the need for a substitute to expensive furniture. They seem to make the claim that never before has there been a company to provide this to the consumer, however, local furniture stores have been offering low-priced, fully assembled furniture prior to the introduction of IKEA. Furthermore, they claim that they are manufacturing beautiful, durable furniture; these claims cannot be quantified and are therefore merely a matter of opinion. One consumer could experience IKEA furniture and regard it as the best design and manufacturing initiative to have ever been implemented in the home furnishing market; another could experience the very same furniture pieces and be completely aghast and appalled by the very idea that these products were regarded as either beautiful or durable. Moreover, they claim to be responding to the home-fur nishing needs of those all over the world; those who have different styles, tastes, and budgets. This is partially false due to the very nature of their marketing. They are not responding to the individual needs of the world, rather they are addressing the various home furnishing needs with the Scandinavian-answer. They are marketing their limited furniture blueprints, styles and designs in an attempt to convince their target markets to change the way they think about furnishings (ephemeral vs permanent, minimalist vs elaborate). They are claiming to be the panacea for those who exist in a world without affordable, high-quality furnishings; they claim to side with the masses. They create a sense of class-warfare and claim that they cant accomplish their noble goal without the help of the consumer. So they propose this seemingly harmless bond between IKEA and customer, because evidently one of the most profitable corporations in the world whom holds some of the most powerful brand re cognition ever, couldnt continue to offer low prices if they had to build their own furniture. It seems slightly ridiculous when you dissect the advertising logically. There is no doubt that forcing the customer to build their own furniture translates into cost savings, but to what extent do the consumers actually get to enjoy those benefits? Nonetheless, they continue to lower prices and increase market share, so their strategy seems to be working very well. The fact that IKEA hopes to have fifty stores in operation in the Unites States by 2013 is an indication of how optimistic the company is about the viability of its value proposition in this country. Do you think IKEA is being overly optimistic in its growth plans? How would you improve IKEAs value proposition to make it even more attractive to American consumers? IKEA will most likely attain its goal of having fifty stores in operation in the U.S. by 2013. However, it will be a challenging task to accomplish without applying significant changes to the overall approach IKEA has taken regarding the U.S. First, they need to perform market research regarding the purchasing trends of not only their current customer demographics, but more importantly, the demographics of the customers that they are not attracting. Secondly, they need to familiarize themselves with the distinct and separate styles to which Americans are attracted. The ability to transpose the traditional (American) way of thinking regarding interior design with a more European (Scandinavian) based fashion may not be advantageous for IKEA. Additionally, the products that IKEA offers are too limited in their usability in different regions of the country. Just as different parts of the world appreciate different styles, different regions of the U.S. do as well. The U.S. is unique that it encompasses all the different ethnicities of the world in a free market, the ability of IKEA to convince every separate ethnic groups individual preferences may not be realistic either. The capacity for adaptive change will be the key to IKEAs continued existence and prosperity. It is a win-win for every party involved: If IKEA performs research to determine what they need to change to be successful in America they: a.) will continuously attract their loyal customers with newer design releases, b.) may capture new market segments of consumers that never considered IKEA an option (through advertising their upgraded and expanded product line) and c.) could recapture discouraged consumers that tested the products, but are no longer interested in the IKEA brand. To achieve the kind of growth that IKEA is hoping for, should the company change its product strategy? If so, in what way(s)? What about its product range-are there limitations to the matrix approach? Should the company expand its product lineup to include a greater number of styles and price points? In what other ways should the company consider changing its product lineup? It should expand its belief that the whole world can be convinced to accept the Scandinavian design is the universal taste in furniture. Most importantly, they need to implement three progressive features to their business model (especially in U.S. market). First they need to adopt a higher quality brand image of their limited product line than they currently possess. After a much needed expansion of their product line, they need to market the increased quality and expanded selection. If they are going to increase the number of stores, then an expanded product line is necessary to attain customers in these new geographic areas. They have the image of simple, functional, stylish furnishings, however price can determine quality and certain consumers have a high aversion to companies that claim that their products are high-quality, but not meant to last a long time; or that their products are beautiful and stylish, but cheap at the same time. These paradoxes are detrimental to the attainment of consumers that are actually affluent. Secondly, they need to adjust to the market in which they are advertising. If they are operating in Midwestern U.S., then after performing market research they need to advertise the products that appeal to that locations population the most. Third, they need to increase the availability of services in their stores, such as delivery for those who cannot transport the number of furnishings they need to outfit their home, financing for large purchases, and company assistance with the assembly of their products. All of these could be acquired at a premium if the consumer chooses to do so. The availability of these offers could further eliminate the consumers that dont consider IKEA an option. IKEA claims to market to the predominantly low-middle income, young, urban and suburban, educated, professionals but at the same time they claim that their typical consumer is sophisticated enough to appreciate fine wine and fine food, participates in international travel with their frequent flier miles, etc. This paradox is illogical in and of itself as well. The ability of a young, educated, low-income, urban dweller to spend their limited disposable income on fine wine, food, and international travel (all the while doing so by saving money on their affordable, yet chic home furnishings) is highly unlikely. The more likely scenario is that this image of the IKEA consumer is the representation that they wish to project in hopes of attracting consumers who wished to be viewed as this depiction as well. It is doubtful that a successful individual with fashionable tastes will spend their income on temporary, particle board furniture. That is the equivalent of considering a McDonalds s ophisticated, urban dining just because it happens to be located in the center of downtown in a metropolitan area. If you had to predict, what do you think IKEAs value proposition and product lineup will look like in ten years?   IKEA will most likely use the size and strength of its organization wisely to expand its product line drastically, increase the availability of corporate offers in order to make its products even more attainable for the consumers, and will implement a locality philosophy to provide certain geographic areas with the styles the local population demands. It will also have a high probability of implementing a massive marketing campaign so as to expose other potential markets to its innovative and efficient designs prior to expanding, thus increasing future demand in locations that may eventually receive an IKEA store. IKEA will most likely also continue its approach to manufacturing by using outsourced manufacturing locations in order to avoid unnecessary costs. IKEA has a high probability of surviving and prospering due to its differentiation/low-cost strategy. Some industry observers have suggested that IKEA should open a number of smaller, satellite stores across the United States (e.g., in shopping malls, strip malls, etc.). By offering a limited range of IKEA products, these IKEA Lite shops would presumably give consumers who do not otherwise have access to a full-size IKEA the opportunity to experience the brand. In addition, consumers who do live near a full-size IKEA would be able to use these mini-outlets to make minor purchases (e.g., purchase a set of mugs, as opposed to an entire living room set). Do you agree with this idea? Why or why not? No, I dont believe that this is in the best interest of IKEAs overall corporate strategy. They have carved a niche in the home furnishings market by doing exactly what they have determined to be the more effective manner of cost-reduction (based on market research). Smaller home furnishings can be attained and purchased through their business-to-customer internet portal through the company website. Usually, consumers are more comfortable purchasing small, inexpensive items over the internet over large, costly items. If IKEA was to implement smaller IKEA-lite stores, they would then be competing with stores such as Bed, Bath Beyond and Pier 1. Their differentiation strategy of self-shopping and self-assembly would be rendered either unavailable or no longer a competitive advantage. Furthermore, the cost incurred to operate and ship small items to these satellite stores would increase the overall costs of the items. The profitability of IKEA comes from the savings of selling large home furnishings to consumers that are willing to assemble the products themselves. The sale of smaller, tier 2 and tier 3 items such as towels, mugs and cups, and storage containers are profitable due to the fact that the consumer is in the main facility looking for large home items. The sale of secondary items is available to complement the larger items. The implementation of smaller, IKEA-lite stores would not be recommended as it conflicts with their current corporate strategy and there is no discernible benefit in changing the methodology at this point in time.

Buffy the Vampire Slayer Essay -- Television TV Show Essays

Buffy the Vampire Slayer While the first seasons of Buffy are structured around an external threat seeking to corrupt the order of the world, later the source of the threat becomes increasingly internal, and the characters must embrace a side of themselves which is evil, irrational, or dangerous. When Giles kills an arguably innocent Ben, he does not suffer the moral ambiguity that Willow encounters when she kills a guilty Warren. Willow has to deal with an evil internal to her in a way Giles does not, and this apparent discrepancy is the result of a general evolution of the series, rather than a double standard. The murder of Ben is comparable to the murder of Warren, even though Ben is mostly innocent and Warren is mostly guilty. They are both human, and their deaths are necessary to stop further evil. Even though Ben cohabits the same body with the hell god Glory, he, as an independent being, is innocent of Glory's actions, as the Scoobies uniformly agree: "What about Ben? He can be killed, right? I mean, I know he's an innocent, but, you know, not, like 'Dawn' innocent. We could kill... a regular guy... (no we couldn't) God." Even the script directions ("no we couldn't") suggest that the way Xander delivers these lines should emphasize the moral impossibility of killing Ben as a way of stopping Glory. Being Glory is to Ben what being the Key is to Dawn: it could make him "other" but it cannot make him either good or bad on Glory's behalf. It is true that Ben is guilty of other things -- he summons the demon who kills (or merely finishes off) Glory's brain sucked victims; and, in "Listenin g to Fear," there is even a real chance that Joyce might get killed because of him (an event which Buffy prevents from happening). .. ...umans into vampires): "at some point someone has to draw the line, and that is always going to be me. You get down on me for cutting myself off, but in the end the slayer is always cut off" ("Selfless"). At the same time, she is the most ambiguous one, the one who is ready to cut all ties with family and friends and kill people she loves, if necessary (e.g., Angel). The requirement that she know exactly which side she must stay on (regardless of where those she loves are) gives her the responsibility to keep the other "other" at all costs -- even at the cost of becoming an "other" herself. This would be the moral equivalent of dying to save lives in "The Gift" -- in this case, crossing over to the dark side in order to prevent others from doing it. Paradoxically, she protects the line which separates good from evil by crossing it, by becoming more and more "other."

How Empirical Psychology Illuminates Issues in Moral Ontology Essay

How Empirical Psychology Illuminates Issues in Moral Ontology ABSTRACT: Although scientific naturalistic philosophers have been concerned with the role of scientific psychology in illuminating problems in moral psychology, they have paid less attention to the contributions that it might make to issues of moral ontology. In this paper, I illustrate how findings in moral developmental psychology illuminate and advance the discussion of a long-standing issue in moral ontology, that of moral realism. To do this, I examine Gilbert Harman and Nicholas Sturgeon's discussion of that issue. I contend that their explorations leave the issue unresolved. To break the stalemate, I appeal to empirical psychological findings about moral internalization-the process by which children acquire the capacity to act in terms of moral norms. I contend that these findings illuminate the issue, suggest a way to advance it, and tend to support a moral realist position. Although scientifically and naturalistically inclined philosophers are concerned with the role of empirical psychology in illuminating problems in moral psychology, such as the capacities for moral agency, they have paid less attention to its potential contributions to issues of moral epistemology and ontology. In this paper, I illustrate how findings in moral developmental psychology illuminate and advance the discussion of the long-standing issue in moral ontology of moral realism. Moral realism is the view that moral realities are objective, and thus in some important sense(s) independent of either the subjective states of moral agents or intersubjective factors. Naturalistic moral realism makes these objective moral realities part of the material world. I examine some recent disc... ...man on moral explanations of natural facts. In N. Gillespie. (Ed) Spindel Conference, 1986: Moral Realism., The Southern Journal of Philosophy , XXIV, Supplement, 69-78. Sturgeon, N. L. (1986b). What difference does it make if moral realism is true? In N. Gillespie (Ed) Spindel Conference, 1986: Moral Realism.. The Southern Journal of Philosophy , XXIV, Supplement,. 115-41. Zahn-Waxler, C., Radke-Yarrow, M. and King, R. A. (1979). Child-rearing and children's prosocial initiations toward victims of distress. Child Development. 50, 319-330. Zahn-Waxler, C. and Radke-Yarrow, M. (1982). The development of altruism: alternative research strategies, In N. Eisenberg (Ed) The Development of Prosocial Behavior (pp. 109-137). New York: Academic Press. Zahn-Waxler, C. and Radke-Yarrow, M (1990). The origins of empathic concern. Motivation and Emotion, 14, 107-130.

Essay --

Almost all young men hit a point in life where his mindset transitions from the imagined indestructability to the comprehension of humanity. Many see it as a steady change with no definite stage of illumination, nonetheless a sequences of open-minded phases or â€Å"the stepping stones into maturity.† For a select few, there is an insight, bounded by a catastrophic occurrence that incites a renovation in one’s outlook on something. Whichever comes to play, the unavoidable renovation subsists. The short story â€Å"Greasy Lake" by Thomas Coraghessan Boyle exposes this rational alteration in three young but â€Å"undeveloped† men as they face a chain of faults, penalties, and reiteration. â€Å"Greasy Lake" is an extremely polished short story that hints the proceedings rising up to the young men’s major transition. This coming of age story can definitely be realistic to comparable tales of men all throughout the biosphere as an imprinted transitional event leading to maturity. For the individuals in this story, a domino effect of problems reveals probable and definite penalties rising to this transition. In the very beginning of this short story, the author lays one of the most significant foreshadows, that depicts immature to mature, and how the characters think they are tougher than they actually are. Describing the â€Å"bad† things the boys do the narrator states, â€Å"We wore torn-up leather jackets, slouched around with toothpicks in our mouths, sniffed glue†¦we drank gin and grape juice†¦. We were nineteen. We were bad" (306). It was almost as if Mr. Boyle wanted the reader to think the boys were full of themselves; and to think that the boys were trying to act older than what their mindset holds. The boys perceived their mirror image as the archetype o... ...ble.† (309). The character’s repetition of their pristine clarification of life originates in the arrangement of a second chance contribution to justify their â€Å"malevolent guy† identity that they preferred previously. As the characters assemble their views and mirror on the previous happenings, two older ladies in a Mustang enter into the lot. The girls were not looking for the decease body that was lifelessly bobbing up in down the lake. No, that would make the ending too non-predictable; the girls from the Mustang epitomize an alternative chance to satisfy the boys’ malevolent behaviors. Beforehand stand simple takings, girls in â€Å"tight jeans [and] stiletto heels" (310) holding a vast number of narcotics and enticement in which they were in desperate exploration for one long night earlier, but with the dark’s happenings still new in their attention, Digby declines.

Wealthy vs. Poor (the True Definitions)

| Wealthy Vs. Poor| The True Definitions| | Sierra Lockett| ENG-101| Jim Andrzjewski | The definition of wealth is very versatile and affects the lives of people in many different ways. It is usually defined as pertaining to riches, luxurious possessions, and an abundance of things of value in general. But to some, it can also mean having a great amount of the things that are considered more important than materialistic assets such as family, friendships, wisdom, health, love, etc.What is the true definition of wealth and does it only relate to things that are great in cash value? Most of today’s official definitions of wealth in dictionaries, glossaries, and thesauruses define wealth as an abundance of valuable possessions or money. There are trillions of advertisements advising people how to obtain it in how-to books, videos, commercials, and step by step guides. Who’s to say that the one who doesn’t have all the materialistic possessions isn’t already w ealthy?People all over the world are striving day to day to have the finer things in life and live the common dream such as a white collar career, luxury vehicles, white picket fence, and the suburban home. The typical classifications of wealth are insufficient and have been misleading people for generations. As a result, people thrive, fight, steal, and kill just to have what is considered the better quality of things in life for their selves and their families. Society must understand that true fortune and prosperity does not come in the form of assets.It cannot be worn around one’s neck, a check cannot be written for it, nor can it be direct deposited. Valuable possessions are things that only bring happiness temporarily and it does not take long before a person becomes bored with it. The tainted and inadequate description of wealth not only misleads but causes one to be prejudice against people who are considered poor. A person is not poor because they lack things of sign ificant value or because their life does not revolve around money.The one who has everything their superficial heart can desire but no one to share it with is the one who is, in fact, poor. Poor just simply means a lacking and official definitions should not state of what the lacking is. Money is the least of what a person can be poor at because even a rich individual can be poor at something. Rich is the one who is plentiful in knowledge and wisdom. How dare someone be prejudice against people who have an inadequate supply of clean water, food, clothing, education, and healthcare?Rich is the person who is still bountiful in faith through strife. Financial income is not the only important factor of wealth or poverty. There are many definitions of being either poor or wealthy. The cash value of something is not what makes it beautiful. The best things in life are completely free such as falling in love, giving birth, and enjoying the beautiful green nature around us. Poor does not ne cessarily mean you cannot enjoy life to the fullest. There are so many individuals who have nothing materialistically but are still content with life because they have each other.True wealth is an abundance of what is important to someone such as what makes them happy. It is not always necessarily money, jewels, and cars. A person living in what is considered poverty can be rich spiritually and family-wise. There is no one definition as to what makes a person poor or wealthy. The definition of wealth is not just having plenty of money and the definition of being poor is not just having a lack of it. It only depends on having abundance or lack of what is important to someone as an individual and not based on what society thinks someone should have.

Accounting Practice †Pa1 Essay

Question 1: a. 2 b. 2 c. 1 d. 2 e. 1 f. 2 g. 3 h. 3 i. 1 j. 2 k. 1 l. 3 m. 2 n. 2 o. 3 p. 4 q. 3 r. 1 s. 1 t. 2 u. 3 v. 4 w. 4 x. 1 y. 2 See more: The stages of consumer buying decision process essay Question 2 a. Potential tax issues related to the payment Erin received in August: 1) For Erin: âž ¢ Based on the information provided, Erin’s employment with CCC was terminated in July 2009 and Erin was informed on July 31, 2009. Thus  the payment Erin received in August is considered as pay in lieu of termination notice. Therefore, it is taxable income and should be reported as employment income in her tax return. But it seems that the amount of $9500 she received is net of tax amount (her total before tax salary for two moths is $12,000). She should contact CCC to get a T4 slip so that she will not be double taxed on $9500. 2) For CCC: âž ¢ Since the payment is related to pay in lieu of termination notice, the correct way that CCC should have done was to deduct income tax, CPP, EI and provided a T4 to Erin. And CCC should pay EHT on that payment too. But Worldwide actually paid the termination pay, CCC failed the responsibility of withholding the income tax, CPP and EI and paying EHT for that payment. No deductible expenses should be charged on CCC’s book. 3) For Worldwide: âž ¢ It seems that Worldwide withheld $2500 from Erin’s termination pay (total before tax salary $12000-net paid amount $9500), which might be charged under income tax payable and others deductions per USA tax act. From Worldwide’s perspective, the payment is deductible expenses. But in fact, since Erin is the employee of CCC, the payroll should be paid through CCC instead of Worldwide. In other word, income tax should be paid to Canada instead of USA. Erin mentioned that the payment was meant to be non taxable since it was somehow related to RRSP, which can not be applied to pay in lieu of termination notice. If the severance pay or retiring allowance were paid to Erin, the portion of payments may be transferred to an RRSP under certain conditions and the amount transferred to RRSP is tax free. But in this case, Erin has done maximum contribution on her RRSP. Beside, if Erin worked for CCC more than 5 years and CCC’s payroll is at least 2.5 million, or severed the employment of 50 or more employees in six months period, CCC is also responsible to pay severance pay to Erin, which is taxable and should be added to salary income. But CCC does not have to pay EHT for severance payment. b. Memoranda Date: xxxx, 2010 To: EHS audit manager From: Ryan O’ Leary, EHS Kitchener office Subject: New issues for audit plan at CCC Dear xxx, Contacted by a colleague from our Vancouver office, I am surprisingly aware of that several CCC’s employees have been terminated and termination payments have been paid from CCC’s parent company, Worldwide Connections Inc, which is a US company. The employees have been told that their termination was due to cash flow problems of CCC. Based on the above information and the fact that we didn’t notice any unusual things during our review of 20Ãâ€"9 T4s for CCC, I would like to draw your attention to how the information received might affect the audit plan and other concerns related to ethical issues. a) First of all, the control risk should be planned higher based on the following facts: âž ¢ CCC should be the one who pays the termination fee and issue T4s to terminated employees but they failed to do so. Instead, their USA parent company paid. It might because the management has no knowledge of this, which they supposed to have or because they intended to do so. Therefore, the integrity of the management seems to be a problem. âž ¢ Cash flow problems: several employees have been terminated due to cash flow problems and their USA parent company helped CCC to pay the  termination payment. It seems that it is the truth that CCC does have problems of cash flow. Beside these factors, examining the following financial ratios would help us to detect the cash flow concerns: i. Quick ratio: (current assets-inventory)/current liabilities: it gives a more rigorous assessment of CCC’s ability to pay its current liabilities. If a quick ratio is greater than 1.0, then CCC has sufficient cash to meet their short-term liabilities. But low or decreasing quick ratio would be a good sign of cash flow concern. ii. OCF ratio: cash flow from operation / current liabilities, this ratio would measure how well current liabilities are covered by the cash flow generated from CCC’s operations. If the ratio is less than 1, it is an indication of cash flow concern and the smaller the ratio is, the bigger the concern. iii. Short-term debt coverage ratio: operating cash flow/ short-term debt, this ratio would measure how well the short-term debts are covered by the operating cash flow. iv. The capital expenditure coverage ratio: operating cash flow/capital expenditure, this ratio compares a company’s outlays for its property, plant and equipment to operating cash flow. A positive difference between operating cash flow and capital expenditures defines free cash flow. Therefore, the smaller this ratio is, the less cash assets CCC has to work with. v. OCF/Sales ratio: this ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or revenues, which tells CCC’s ability to turn sales into cash. The greater the amount of operating cash flow, the better. There is no standard guideline for the operating cash flow/sales ratio, but obviously, the ability to generate consistent and/or improving percentage comparisons are positive qualities. It would be a concern to see CCC’s sales grow without a parallel growth in operating cash flow. Positive and negative changes in CCC’s terms of sale and/or the collection experience of its accounts receivable will show up in this indicator. b) The audit risk needs to be planned to a lower level based on the higher control risk. Therefore, the detection risk has to be lower to reach the acceptable level of audit risk, which means more samples and substantive procedures need to be performed especially on payroll cycle and balances and transactions related to cash flow. c) Potential ethical issues that might affect our audit plan: âž ¢ Integrity of CCC’s management: like I mentioned previously, it is reasonable doubt for CCC’s management’s integrity due to the fact that they failed to collect income tax and other deductions for the employees worked in Canada and had their USA parent company paid. The management either intended to do so to try to hide the cash flow problem or lack the knowledge of knowing their responsibility of collecting income tax and pay EHT when they make termination payment. Besides, when the time we did review of T4s, we were not told by the management the termination and payment from USA Company. Therefore, I would like to recommend to interview with the management first to understand what their intention was and interact with the higher level of management if necessary. If no correction can be agreed upon or no cooperation from the company, then involve CRA and audit committee. âž ¢ Due care /competence of our audit team: based on the fact that several employees have been terminated and nothing has been found unusual during our T4s review, it seems that due professional care and competence of our audit team is also questionable. I would like to recommend that not only use more experienced auditors, but also remind the team that perform the job with due dare to avoid unnecessary undetected misstatements. I look forward to discuss the details with you! Sincerely, Ryan Question 3 a. A Memo to Albert Desrosiers: Memoranda Date: Feb 18, 2007 To: Albert Desrosiers, Audit Manager, Morrison and Associates From: Wei Liu, CGA, Audit Manager, Morrison and Associates Subject: Assessment for financial position and audit at Prime Restaurant Suppliers Ltd (Prime) Dear Albert, Upon your request, I have analyzed Prime’s financial ratios and the balance sheet and reviewed the audit work done by Paul. I would like to discuss the following issues with you: i. After analyzed and evaluated Prime’s financial ratios and the balance sheet, the following are the problem areas that could impact the nature of the audit work required thus need our special attention: âž ¢ Inventory: it has increased significantly over the past two years, 27% in 20Ãâ€"6 and 35% in 20Ãâ€"5. And inventory turnover has dropped 0.6 from 3 in 20Ãâ€"5 to 2.4 in 20Ãâ€"6. It is an indication of either excessive inventories or ineffective buying or misstatements of valuation in inventory. Substantive procedures would be required to make sure the assertions of existence, valuation, ownership are fairly presented. Performing test counts of inventory should be done more cautiously. âž ¢ Accounts receivable: It increased 8.7% in 20Ãâ€"6 and 43% in 20Ãâ€"5. And receivables turnover has dropped 0.4 in 20Ãâ€"6 and dropped 0.6  comparing to industry average. Meanwhile, the average collection period has increased 16.8 days, which increased 21%. However, sales only increased 1.3% in 20Ãâ€"6. All of these indicated that the collection of accounts receivable is questionable and Prime’s credit policies might not be efficient or the allowance for bad debt is not adequate. Therefore, more positive confirmation of accounts receivable might be necessary to ensure the existence and valuation; review allowance for doubtful accounts to make sure whether it is adequate; review aged AR report; review credit and collection policies; perform cut-off procedures and so on. âž ¢ Sales: Even though sales have increased in 20Ãâ€"6 by 1.3% and 16% in 20Ãâ€"5, but net income dropped significantly by 47% in 20Ãâ€"6 and 0.3% in 20Ãâ€"5. And gross margin has dropped 4.5% in 20Ãâ€"6 and 8.9% lower than industry average. Net margin has dropped by 2% in 20Ãâ€"6. When interest expenses are lower than prior’s years due to lower bank loans and mortgage and term loans and other operating expenses has no signs of increase, the reason for higher sales but much lower net income (before tax) are focused to costs of goods sold. Again, we need to take extreme cautions to make sure that existences, valuation, ownership of inventory are fairly presented. On the other hand, more procedures need to be done to make sure the revenue recognition is reasonable. âž ¢ Cash flow/accounts payable-inventory: it has no balance recorded on the balance sheet for cash. Even though Prime’s current ratio is 1.19, but quick ratio is only 0.65. Even worse is that accounts receivable is not dependable due to potential collection problem or overstatement. Accounts payable-inventory has increased 37% in 20Ãâ€"6, plus other current liabilities, Prime is facing a serious cash flow problem. The significant increase in Accounts payable-inventory pointed out again the problem of inventory, either excessive inventory has been obtained or ineffective buying has been happening. Substantive procedures should be performed cautiously on accounts payable-inventory to make sure its valuation, existence. Positive bank confirmation should be obtained. âž ¢ Income tax payable/future income tax liabilities: income tax payable has decreased 81% in 20Ãâ€"6 but future income tax liabilities increased 4.7%. In total, it decreased 40% while net income decreased 47%. Examining the computation is necessary to make sure fair presentation of these two figures. ii. With respect to Paul’s recommendation regarding the audit report, I have the following different opinions: âž ¢ I don’t agree that Paul restricted subsequent evidence accumulation to Prime’s accounts receivable and inventory. From part I analysis of financial ratio and the balance sheet, we know that Prime has a high control risk in accounts receivable and inventory, therefore, we can not restrict subsequent evidence accumulation. Controversially, sufficient evidences need to be collected to allow the audit risk lower to an acceptable level. âž ¢ Paul concluded from what he could observe that internal control were present and appeared to be operating as intended. This is not correct. First of all, internal control has to be tested whether we rely on it or not. Secondly, Prime only did review engagement for prior years and never be audited. And an audited financial statement is needed for Prime’s loan approval process thus the management has the motive to manipulate the statements to get the loan. Plus concerns showed from their financial ratios and balance sheet, including high increased inventory, AR, AP, cash flow problems, all of these facts indicates that we are facing a client with high control risk and inherent risk. Internal controls have to be tested. âž ¢ Paul concluded that changing of LIFO accounting from FIFO has no big impact on income statement and balance sheet due to consistent inventory cost over the year. That is wrong. The inventory was increased significantly over two years, which means the cost of inventory in 20Ãâ€"5 could be very different comparing to 20Ãâ€"6. More importantly, if LIFO is allowed used in 20Ãâ€"6, a retroactive procedure need to be done for previous year’s financial statements. âž ¢ Paul instructed the other assistant to ensure that goods shipped in the last few days of the year were recorded in sales. The shipped goods to customers is not the only criteria that we can recognize the sales. We need to make sure other criteria also presented, such as the amount can be measured and collection is reasonable assured or an allowance of bad and doubtful accounts is properly set up. âž ¢ 10 confirmations for AR have been sent out. I am not quite sure what this number are based on. But if it is just a random number, no sample size and materiality was put into consideration, it is not appropriate number. âž ¢ Paul believed that testing was sufficient for him to issue unqualified audit opinion. Based on all above mentioned disagreement, this conclusion is certainly too early to make. More substantive procedures need to be done. Evidences collected so far is not enough to make conclusion. iii. Other issues: âž ¢ Without permission from Mrs.Ruenstein, who is the owner of GoodFood Manufacturing, Paul showed Marvin a copy of GoodFood’s financial statements and advised him about Mrs.Ruenstein’s plan to retire. This is violation of confidentiality policy. I think we should advise Paul and inform GoodFood as soon as possible and explains the situation. Even though it might benefit the both parties, we still need to prepare for GoodFood’s complain/lawsuit. I look forward to hear from you and discuss more in details. Sincerely, Wei Liu b. Prime should consider the acquisition of GoodFood mainly based on the following facts: âž ¢ They are in the same industry but focus on  different customers. By acquiring GoodFood, Prime can expand its business into larger restaurant market. âž ¢ Prime’s strong sales team has been successful in generating leads to attract new customers. Therefore, it meets Mrs.Ruenstein’s desire to invest additional effort to build up sales levels. âž ¢ GoodFood has plenty of excess capacity that can compensate Prime’s shortage of cash flow and other capacity. The concerns about financing the purchase: Prime might have difficulty to obtain a long term loan to finance its purchase based on its current financial position. Even though Prime has increased sales in 20Ãâ€"5 and 20Ãâ€"6, but net income has dropped 47% in 20Ãâ€"6. It has large and increased current liabilities but has no reliable cash flow to depend on. Inventory is excessive, and AR’s average collection period is dropped. Return on total equity has dropped to 6.7% from 13.6% due to big drops in net income. All financial information is negative and can not support its financing request. However, if Prime can conquer the storage constraints and change back to FIFO accounting, it might be a big difference. Its cost of goods sold would dropped and net income would be increased! Question 4: A Letter to Board of Directors: Wei Liu, CGA Xxx Audit and consulting Firm Board of Directors, Townsville Recreation Centre (TRC) Date: December xxx, 2009 Dear Board members, It is my great pleasure to be in the position of providing my opinions regarding the creation of TRC and upcoming transfer of the recreational  facilities from the municipality to TRC. The following you will find the discussions related to that and other issues requested by you, including the proposal for the social media site. âž ¢ Creation of TRC and transfer of the recreational facilities from the municipality: o As what we all understand, the purpose of creating another independent legal entity, TRC, is to getting better information for decision making; to offer a wider range of lessons and activities on a cost-effective basis. It is agreed that Townsville would transfer not only all existing properties of the recreational centre operations and any related debt, but also all employees of the recreational centre. Therefore, from the financial perspective, TRC will record all transferred properties at fair value, record all related debt for remaining balance per bank’s confirmation, including unpaid accrued interests. A deferred capital contribution would be used to reflect the funding from Townsville. As for all employees being assured that they would still be eligible for pensions as well as health and insurance coverage, the board need to make sure the details of the pension plans need to be discussed and prepared to accommodate old employees and new employees and make sure the pension policies and procedures as well as health and insurance coverage policies and procedures are in place. It is better off for TRC to consider only offering the defined contribution pension plans to employees instead of defined benefit plans since the first one is less cost and less burden on TRC. The cost to cover the pension plans and coverage should also be planned and budgeted. âž ¢ Accounting policies, format of the financial statements, and information necessary for decision making: o After transfer, TRC would be an independent non-for-profit legal entity. Therefore, all accounting policies need to be compliance with GAAP-general accepted accounting principles from CICA Handbook. PSA (Public sector accounting) Handbook will not be appropriate any more. TRC should determine and disclose which method is used for revenue recognition, either deferred method or the restricted fund method. The restricted fund method would be more suitable in  TRC’s situation since TRC receives subsidies for low-income individuals as restricted funding. Separate reporting on this restricted funding would be benefit for users, including Townsville to better understand the statements. And other significant accounting policies, such as accounting for capital assets and donated materials and services, use of estimates etc should be determined and disclosed. o As for the format of financial statements, according to the GAAP, normally it include: Statement of financial position; statement of operations; statement of changes in net assets; statement of cash flows. o Information necessary for decision making: the board should obtain information not only from financial perspective, such as summary on TRC’s financial position, implication of current economic, government’s budget plan; but also non financial performance reports, such as whether TRC would be actually offering more lessons and activities on a cost effective basis. âž ¢ Requirements of the information technology system: o Although it is costly to invest a new information system, but without it, it is much harder to produce useful and more reliable information to assist management operations effectively and efficiently. The new information system should not only record basic accounting information, but also produce information, like costs and revenues preparation between budgeted amount and actual amount; required funding reports; data for performance measurement etc. Also the board should ensure that policies and procedures for data integrity and security, IT supports, training for skilled personnel are all in place. âž ¢ Implications of the change in employment: o As part of transferring agreement, all current employees of the recreational centre will become employees of the TRC and they will be still eligible for pensions and health and insurance coverage. Therefore, all income tax, CPP and EI have been contributed will be considered as contributed under TRC. For those employees who are nearly retiring, they can  chose move their pension plan to TRC or leave it. And they can start to withdraw once their age reached to the defined age in the pension plan. âž ¢ Independent contractors and employees: o From the tax’s point of view, making a distinction between independent contractors and employees is very important since for independent contractors, they are responsible for reporting business income for their tax return. TRC has no responsibility to withhold income tax, CPP and EI for them and do not have to provide same benefits to contractors as employees have. TRC also do not pay EHT for amount paid to independent contractors but need to pay EHT for remuneration paid to employees. o The factors to consider for distinctions between independent contractors and employees: ââ€" ª Controls: Generally, in an employer-employee relationship, the employer controls, directly or indirectly, the way the work is to be done and the work methods used. But the contractors controls if he/she has the right to hire or fire, and decide where, when and how the work will be done. ââ€" ª Ownership of tools: if it is employer-employee relationship, the employer generally supplies the equipment and tools required by the employee; also employer covers the cost of repairs, insurance etc for using of tools. ââ€" ª Chance of profit/risk of loss: the employees are entitled to his or her full salary or wages regardless of the financial health of the business, the employer alone assumes the risk of loss. But for contractors, all risks are his/hers. ââ€" ª Integration or organization test: the tasks performed by employees form an integral part of the business but tasks performed by the independent contractor merely being accessory to the business. âž ¢ Revenues: TRC’s revenues include subsidies provided by the Townsville, membership fees, registration fees and rental fees. To maximum the revenues, I would like to recommend: o Subsidies from the Townsville: to be eligible to get the funding, TRC will have to provide complete listings of names, income levels, and subsidies provided. This information has previously been tracked through  Townsville’s accounting system. Therefore, TRC could use the same system and maintain the same reporting to ensure maximum subsidies funding. o For memberships are provided free of charge to families below a specific income level, the membership fees are actually covered by subsidies funding, revenue should be recognized even through the funding not yet received and fund receivable from Townsville could be set up. o Registration fees: under the municipality’s management, often the lesson was run at a loss due to under enrollment or a higher than anticipated number of subsidized registrants. Therefore, the board should enforce the management in TRC to implement a better budget system to budget the registration fees and number of enrolment. The board and the management should work on strategies of getting more people to sign the lessons and activities. Meanwhile, TRC should consider setting up a policy that maintains the right of cancellation of lessons/activities in the case of enrollment not covering the cost. o Rental fees: rental of the facilities is scheduled only around the times that the facilities are open to members and the general public, thus the rental income is limited due to time restraints. The board should consider a plan to expand available time for rental and fully use the facilities to maximum the rental income. âž ¢ Performance measures: o I understood that TRC would evaluate employees’ performance partly based on measures that are reflective of the mission statement objectives. Therefore, the board should be provided with performance reports that can help you to define the mission statement objectives have been met. The list below should be considered for performance measures: ââ€" ª The number of lessons/activities offered ââ€" ª The type of lessons/activities offered ââ€" ª The number of attendants for each type of lessons/activities ââ€" ª newly developed lessons/activities offered ââ€" ª Attendants for new lessons/activities ââ€" ª Number of individuals received subsidies ââ€" ª Type of lessons/activities offered to low-income families ââ€" ª Cost and revenue for each type of lessons/activities. âž ¢ Internal controls for Cash: o It seems that the internal controls for cash were not quite adequate due to the fact of theft of cash. To ensure this not continually happening in TRC, the board should make sure better internal control polices and procedures for cash management are in place, such as: segregation of duties for collecting and recording and bank reconciliations; more frequent cash deposit; proper authorizations, etc; the board should also make sure the implementation of the controls will be happening. âž ¢ Auditor for TRC: o According to Canadian auditing standard, we can not accept audit engagement if we provide non-assurance services, such as accounting and bookkeeping services; valuation services; internal audit service; financial information systems design or implementation services. Based on the fact that we are now providing the consulting services not relating to those, we will be able to provide audit service to you. As for the fees schedule, we need to follow a standard fee schedule. âž ¢ Proposal of the social media site: o The social media site provides many benefits for TRC to expand. While building up the site is necessary, many things need to be taken into consideration, especially when it is related to confidentiality and safety of information. It is not appropriate to publish the lists of all people being subsidized because it might violate the confidentiality policy; also to be able to keep the information collected safe, including client’s credit card number, the site has to be maintained under certain security to ensure data security. Besides, the board need to make sure whether there are skilled or enough personnel to maintain the site. More importantly, the board need to evaluate the overall costs to make sure that TRC does have the capacity to run this media site in a cost effective manner. If you need more clarification, please feel free to contact me. I would be happy to discuss more details with you. Sincerely, The end of assignment 8