Premium Essay

External Environtment

In: Business and Management

Submitted By Richie
Words 1149
Pages 5
The External Environtment : Opportunities, Threats, Competition, Competitor Analysis

The main ideas: The external environtment affects a firms strategic action, the firms strategic actions are affected by conditions in other segments of it general environtment, such as the political/legal and physical environtment segments.
Requirement for implementing ideas: External environmental analysis This external environment analysis consist of 4 element : scanning, monitoring, forecasting, and assessing.
Scanning : Scanning entails the study of all segments in the general environment. Through scanning, firms identify early signals of potential changes in the general environtment and detect changes that already under way.
Monitoring : When monitoring, analysis observe environmental changes to see if an important trend is emerging from among those spotted through scanning. Critical to successful monitoring is the firms ability to detect meaning in different environmental events and trends.
Forecasting : When forecasting, analysts develop feasible projections of what might happen, and how quickly, as a result of the changes and trends detected through scanning and monitoring. Forecasting events and outcomes accurately is challenging.
Assessing : The objective of assessing is to determine the timing and significance of the effects of environmental changes and trends that have been identified.
Segments of the General Environment
The Demographic Segment : The demographic segment is concerned with a populations size, age structure, geodraphic distribution, ethnic mix, and income distribution. Demographic segment consist of :
Population Size : While observing the population of different nations and regions of the world, firms also want to study changes occurring within different populations to assess their strategic implications.
The Political/Legal Segment : The

Similar Documents

Free Essay

Multiple Baselines Across Behaviors

...testing effects, and instrumentation to name a few. The time to be concerned with internal validity is in the design phase when careful consideration needs to be used when which variable will be observed and recorded and this is the time to identify any rival behaviors because after he intervention is ran it is too late. Other behavior issues could surface with Steve and he may transfer his behavior to another setting that would affect external validity. Sometimes when increasing internal validity it may decrease external validity. Uncontrolled variability can be reduced only if you identify its sources. The first step in identifying these uncontrolled variables are to graph the data and look for uncontrolled variables in the baseline. These will be evident if the data points on the graph show moderate to high levels of instability across observation periods. If the observed variation is within acceptable limits then you accept the observed effects as reliable. To establish external validity intrasubject replication must occur. The threat to external...

Words: 630 - Pages: 3

Premium Essay


...Government regulated monopoly GAAP General Standards 1. Adequate training and proficiency 2. Independence in mental attitude 3. Due professional care Standards of Field Work Proper Planning and supervision Understanding of the entity Sufficient appropriate evidence Standards of Reporting Statements prepared in accordance with GAAP Circumstances when GAAP not consistently followed Adequacy of disclosures Expression of opinion on financial statements *Test* Table 5.1 Definitions And broad broad stuff Can accept a gift from a client as long as its no more than “token” or the amount the firm gives you You can indirectly own stock in an auditing client if its immaterial to your net worth You cannot be paid in stock Because we don’t see the audit as one event, its not a series of events even though that looks like it. Because once you have the client you usually have it for a good amount of time. “The professional engagement period begins when the registered public accounting firm either signs an initial engagement letter (or other agreement to review or audit a client’s financial statements) or begins audit, review, or attest procedures whichever is earlier: and (B) the professional engagement period ends when the audit client or the registered public accounting firm notifies the commission that the client is no longer that firm’s audit client. You might be able to write a contract that can say the audit engagement is only a year and you might get...

Words: 1134 - Pages: 5

Premium Essay

Impact to Corporate Governance

...cost-effective and time-efficient manner. They are also responsible for the day-to-day operation of the organization, including managing committees and staff and developing business plans in collaboration with the board for the future of the organization. They shall make reports on a regular basis – quarterly, semiannually, or annually. Auditors might affect the corporate governance of an institution by overseeing management activities in managing credit, market, liquidity operational, legal and other risk of the corporation and they shall assist the board in the performance of its oversight responsibility for the financial reporting process. How can the firm’s external institution affect the corporate governance of an institution? The external institutions of corporate governance include the government, markets, external auditors and industry. Government makes policies that should be followed by institutions. These policies shall be the guide of the institution in attaining better corporate governance. They make instructions and guides the institution on how it should improve its operation. It includes investments and production. Its negative impact is when they make certain additional collections and penalties even though it is not needed to be...

Words: 496 - Pages: 2

Premium Essay

Ocean Manufacturing Case Solutions

...Acct 4080 Ocean Manufacturing Case 1. 1) Obtain and review financial information about the prospective client: annual reports, interim statements, registrations statements, Form 10-k’s, and reports to regulatory agencies. 2) Detailed criminal background checks of senior managers. 3) Evaluate the public accounting firm’s independence with regard to prospective clients. 4) Inquire of the prospective clients’ bankers, legal counsel, underwriters, analysts, or other persons who do business with the entity for information about the entity and its management. 5) Consider the need for individuals possessing special skills or knowledge to complete the audit (e.g., IT auditor, valuations specialist, industry specialist) 2. Overall, after calculating a few of Ocean Manufacturing ratios and comparing them with the industry, the company’s figures are not performing up to others in the industry. ROE = NI/Stockholder Equity (2011,2010)= 8.9% and 7.1% ROA = NI/Assets= 4.5% . 3.8% Both return on equity and assets are lower than industry ratios but are improving. Accounts Rec Turnover—could not calculate without % of credit sales from cash sales. Profit Margin = Operating income/ Sales(rev) = 5.5%, 6.0% PM are also low compared to the industry average. 3. There are a few non-financial items the company should consider. a) The VP of finance was charged with a misdemeanor related to illegal gambling. Raises questions about the tone at the top and the integrity...

Words: 493 - Pages: 2

Premium Essay

Business Plan

...Program/initiative as listed in YPPB 2013 Strategic Plan (file YPPB 2013 Plan v1.0.ppt – slide 8-10). The relevant department must complete the items below for each program/initiative. Program/Initiative | Corporate Social Responsibility | Department | Corporate Services | Brief Description | To reach out to more to the public and extend assistance and at the same time introduce branding Yayasan further | Target Launch Date | Jan 13/Mar13/Dec13 | Duration | 1 Day Per Event | | Program Objective | Objective must be measurable (target achievement) and can be basis for KPIs 1. To expend CSR initiative for YPPB every quarter | Target Participants / Group | Target No. of Pax | 20-30 (YPPB Staff & Volunteers) | 1. For the Hereafter – Aid to Surau/Musolla/Madrasah outside KL 2. Clean & Go – Community service at nursing home/pet shelter 3. Childrens Day 4. Buka Sekolah Drive – Orphanage/Children Single Mother Group/Children from Underprivileged background | Activities | Duration | List of activities to be carried out during the program/initiative in chronological order including decision required 1. For the Hereafter – Upgrade of amenities (carpets/curtains/abulation area etc) 2. Clean & Go – Gotong-royong/mural painting/recreational area 3. Childrens Day 4. Buka Sekolah Drive – School registration fee and equipment to 100 Primary and Secondary School kids. | 1 Day1-2 Days1 Day1 Day | Potential Partner / Vendor | Scope of...

Words: 1141 - Pages: 5

Premium Essay

A Day in the Life of Brent Dorsey

...Case Number: 3.1 Date: 09/02/2013 Case Requirements: [1] Brent’s alternatives include following the audit plan and reporting the time accurately, even if the time needed exceeds 35 hours. The positives to following the plan and reporting time spent accurately include doing his duty by adhering to the audit plan and ensuring that this years and future audits are conducted with realistic expectations as to the time and budget needed. A negative to this alternative is the damage that will ensue with his supervisor, the damage to his reputation within the firm and possible damage with the client when the audit comes in over budget. Brent could do as John says and only report 35 hours to complete payables even if the actual hours exceed 35 hours. He will enhance his relationship with his supervisor and within the firm while doing a good job for the client by following the audit plan. Unfortunately, he will likely cause further damage with his wife and increase his stress level. Furthermore, he’ll also be dooming audit teams in subsequent years to unrealistic expectations. Finally, he could deviate from the audit plan and reduce the number of invoices he examines so he is assured to finish within the 35 hours allotted. By deviating from the plan he will enhance his reputation with his supervisor and within the firm. The client will end up happy; however, if the audit of payables does not catch a material misstatement there good be negative consequences for the firm and...

Words: 744 - Pages: 3

Premium Essay

The Sox

...The Sarbanes-Oxley Act (SOX) was the result of innumerable corporate scandals such as Enron, WorldCom and Tyco. These companies were misrepresenting their financial reporting to investors and stakeholders to make themselves look more financially stable when in reality they were not. This misrepresentation resulted in huge financial losses and the mistrust of investors in the market. In order to better control financial reporting and restore investors trust, the SOX act was passed. Sarbanes-Oxley aims to enhance corporate governance and strengthen corporate accountability. It does that by: • formalizing and strengthening internal checks and balances within corporations • instituting various new levels of control and sign-off designed to • ensure that financial reporting exercises full disclosure • Corporate governance is transacted with full transparency. (Sarbanes-Oxley Essential Information) The Sarbanes-Oxley Act implemented new standards for financial reporting accountability in a way that CEOS could not pass on the blame to others. They cannot hide behind the “I was not aware of the company’s financial issues “reason anymore. Executives are now held responsible for any financial misrepresentation in their companies’ reporting. They are also held accountable for the design and implementation of new internal control to validate their financial records. Thus, they are responsible of making sure that an internal control report as well as an internal control assessment...

Words: 849 - Pages: 4

Premium Essay

Accounting Fraud at Worldcom

...Accounting Fraud at WorldCom 1) What are the pressures that lead executives and managers to “cook the books?” After the rapid evolution of the telecommunication industry in the 1990s, WorldCom shifted its strategy to focus on building revenues and acquiring capacity sufficient to handle expected growth. Their biggest goal was to be the No. 1 stock on Wall Street rather than capturing the market share. As a result, their Expense-to-Revenue (E/R) Ratio was their measurement for their main objective (increase revenues and become the No. 1 stock on Wall Street). Due to heightened competition, overcapacity and the reduced demand for telecommunication services at the onset of the economic recession and the aftermath of the dot-com bubble collapse, the telecommunication industry conditions began to deteriorate. Prices were falling and WorldCom had no option but to cut their prices as well. This action placed severe pressure on WorldCom’s most important measurement, the E/R ratio. The E/R ratio was being affected due to revenue and pricing pressures while the committed line cost was still the same. 2) Is there a boundary between earnings management and fraudulent reporting? If so, what is it? “Earnings Management is recognized as attempts by management to influence or manipulate reported earnings by using specific accounting methods (or changing methods), recognizing one-time non-recurring items, deferring or accelerating expense or revenue transactions, or using other...

Words: 3407 - Pages: 14

Premium Essay

Worldcom Solutions

...First of all, line costs are the amounts that WorldCom paid other companies to be able to use their communication networks for their customers and it included access fees and transport charges for messages. The line costs are an expense and instead of reporting them as an expense at the time, they chose to hold off on paying them and adding them in as an expense so that it would look as though WorldCom was earning more than they really were. The first solution should have been to relook at the financial statements of WorldCom from an ethical standpoint. Instead of ignoring expenses or changing expenses into assets and assets into expenses, WorldCom should have followed the guidelines of the Generally Accepted Accounting Practices and the SEC and followed the accrual method for their financial statements. If Scott Sullivan would have followed the rules of the GAAP and the SEC, WorldCom could possibly have gotten themselves out their financial hole rather than making it larger. Since that did not happen the internal auditors are considered to be the first line of defense against accounting errors and fraud within a company. The treatment of those line costs was found by Cynthia Cooper who was WorldCom’s internal auditor. It was brought to the attention of Scott Sullivan (WorldCom’s CFO) and they wanted him to explain why they had treated their line costs as capital expenditures. Now, the purpose of the United States securities law is to help protect all investors in a company...

Words: 715 - Pages: 3

Premium Essay

The North Face Case

...1. Should auditors insist that their clients accept all proposed audit adjustments, even those that have an “immaterial” effect on the given financial statements? Defend your answer. No. Clients have rights to reject some proposed audit adjustments if they disagree with these adjustments. According to the part of the fifth and final phase in the audit opinion formulation process in our textbook, some additional evidence would be gathered if the evidence does not support a fair presentation. It also mentioned that “The account balance is misstated, but the client disagrees. The auditor will issue an audit report indicating that the financial statements, in his or her opinion, are not fairly presented.” Should auditors take explicit measures to prevent their clients from discovering or becoming aware of the materiality thresholds used on individual audit engagement? Would it be feasible for auditors to conceal this information from their audit clients. ? It would be feasible for auditors to conceal this information from their audit clients. In the North Face case, Crawford, The North Face’s CFO, knew the materiality threshold that Deloitte had established for them, and also knew that the gross profit of approximately $800,000 on the $1.64million fell slightly below Deloitte’s materiality threshold for North Face’s collective gross profit. He believed that company would pass on that proposed adjustment. If CFO of North Face didn’t know the threshold, it would be another...

Words: 627 - Pages: 3

Premium Essay

Esanda Finance Group

...Esanda Finance Corporation Ltd v Peat Marwick Hungergords – indirect recipient of info • Facts: financier (Esanda) lent money to Excel in reliance on E’s audited accounts (Peat Marwick) and reports - could not recover money. Sued E’s auditors for alleged negligence. • Issue: whether auditors owe a duty of care to persons other than their clients who have relied on their unqualified reports in entering various financial transactions. • Held: Esanda appealing – appeal dismissed  auditors do not owe a duty of care to all users of their info (duty only extends to their clients). o Brennan J: o Mere foreseeability of the possibility that a statement made or advice given by A to B might be communicated to a class of which C is a member and that C might enter into some transaction and suffer subsequent financial loss is insufficient to impose on A a duty of care owed to C in the making of the statement or the giving of the advice. o Following Caparo Industries Plc v Dickman - But, in every case, it is necessary for the plaintiff to allege and prove that:  the D knew or ought reasonably to have known that the information or advice would be communicated to the P, either individually or as a member of an identified class,  that the information or advice would be so communicated for a purpose that would be very likely to lead the P to enter into a transaction of the kind that the P does enter into  and that it would be very likely that the P would enter into such a transaction...

Words: 543 - Pages: 3

Premium Essay

Company Law

...Adequacy of Legal Protection for Auditors Loganathan Krishnan Department of International Business, Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman, This paper was presented at the International Conference on Emerging Issues in Public Law: Challenges and Perspectives, Faculty of Law, Universiti Teknologi MARA (UiTM), 13th to 14 December 2011, Shah Alam, Malaysia. ABSTRACT In Newton v Birmingham Small Arms Co (1906), the English court made it clear that the rights of auditors cannot be abridged nor restricted by any regulations of the company. This is to ensure that the auditors’ rights are secured. The rights are unqualified and this will enable auditors to discharge their role and duties effectively. Additionally, the Companies Act 1965 (CA) gives substantive powers to enable auditors to carry out their duties effectively. This is because if their hands are tied, they will not be able to uncover any wrongdoings by the company’s management. In fact, any one who obstructs their duties, is in breach of the CA. Auditors have a right of access at all reasonable times to the accounting records and other records, including registers of the company. Moreover, the CA provides that auditors enjoy qualified privilege in certain circumstances. Thus, this study investigates imperative issues on the office of auditors concerning rights, powers and privilege. This is to strengthen the role and duties of auditors to bring about a more...

Words: 5159 - Pages: 21

Premium Essay

Effect of Unethical Behavior Article Analysis

...Effect of Unethical Behavior Article Analysis Lindsey Davison August 26, 2013 Acc/291 Jonathan Gillen Effects on Financial Statements When the Sarbanes-Oxley Act was implemented in 2002, it impacted a lot of publically traded companies. There were many companies that were using unethical practices to boost their numbers and give the top dogs of the company’s loads of money. Companies like Enron, Tyco, and WorldCom were companies that most of us heard about getting hit the hardest once the act was put into place. The Sarbanes-Oxley Act created a Public Accounting Oversight Board to ensure that financial statements are audited according to specific standards. This makes it to where those who are in top financial positions such as Financial Executives and Chief’s are held directly responsible for what is being reported to the SEC. With that being said, the Act also makes it to where the audits aren’t in complete control of those in top positions, so they can’t audit their own work basically, which is exactly how the above mentioned corporations got away with it for so long. There have been both positive and negative effects of the Act; positive effects are that investors are more confident in making solid investments (Fass, 2003). Some negative effects are that companies are spending a lot of time, money and concentration on updating their software to be up to par on the new standards, like the Section 404 certification (Fass, 2003). Those are just minimal if you...

Words: 574 - Pages: 3

Premium Essay

Pcaob Research Assignment

... 1. After the report release date – can the auditor delete or discard or add information to the audit work papers? Information cannot be deleted or discarded from the audit work papers after the report release date, but information can be added to the work papers after the release date. 2. Certain audit matters may be documented in a central repository for the public accounting firm or in the particular office participating in the engagement. What matters may be documented in this manner and does the specific engagement’s audit documentation need to include a reference to such matters? Matters such as auditor independence, staff training and proficiency, and client acceptance and retention may be documented in a central repository. Also, yes, the specific engagement’s audit documentation needs to include a reference to the central repository if one is utilized. 3. May an auditor conduct an engagement to report on whether a previously reported material weakness continues to exist if and, if so, what are the related requirements that the auditor must comply with? An auditor may report on whether a previously reported material weakness continues to exist at a company only if all of the following conditions are met: • Management accepts responsibility for the effectiveness of internal control over financial reporting; • Management evaluates the...

Words: 950 - Pages: 4

Premium Essay

Sarbanes Oxley Act

...route. First let me start off by informing you want the Sarbanes – Oxley act is, it is a government act that changed the old SAS no. 59 as a result of the Enron and World Com financial collapses (Ryu 2009). The law was enacted to enhance the standards for all US based public companies financial reporting, this happened as a result of the Enron and World Com financial collapses (Elson 2008). This law was designed to help create auditor independence, so financial reports that are relied upon from prospective shareholders and lenders are accurate.(Li-ying 2011). The law, as I have said was enacted as a knee jerk reaction to the Enron collapse, it was discovered that Arthur Anderson the accounting firm for Enron was both their internal and external auditors. The two companies were so comingled it was hard to differentiate which employee worked for who, both the CEO and CFO both had previously worked for Arthur Anderson (Ryu, 2009). The law which is known as SOX changed how responsible auditors were for the opinions they gave on the financial reports they audited. The outside public depended on these reports to make financial decisions, and determine the financial health of any entity. This law changed the auditor’s liability; it now requires that auditors have a detailed knowledge of the internal controls in each audit that an opinion is given on. SOX requires management certification, adequate disclosures, management responsibility to maintain financial documents, and auditors...

Words: 1320 - Pages: 6