Urban Outfitters

Posted by & filed under Accounting Information Systems, Advanced Accounting, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting.

Questions:
1. What type of public relations problem did Urban Outfitter’s have in September 2014?
2. Explain the importance of Urban Outfitter’s ability to exceed analysts predictions for the fourth quarter.
3. Urban Outfitters announced that its board of directors recently approved a repurchase of 20 million shares under a share repurchase program. What are some of the reasons that a company might want to repurchase its own stock?
4.Explain how Urban Outfitters would account for the shares repurchased.

Source:

McGrath, M. (2015) Retail Therapy: Urban Outfitters Earnings Beat Estimate As Quarterly Sales Improve. Forbes, March 9 (Retrievable online at http://www.forbes.com/sites/maggiemcgrath/2015/03/09/retail-therapy-urban-outfitters-earnings-beat-estimate-as-quarterly-sales-improve/)

Company Signs

Dow Jones Industrial Average Changes Ahead

Posted by & filed under Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Uncategorized.

Apple, the highest-valued company in the world, will be added to the Dow Jones industrial average next month in yet another sign of how popular the computer giant has become for investors.

Questions:
1. Which stock will Apple replace in the S & P Dow Jones Indices?
2. What are some of the unique facts in terms of Apple’s raw value?
3.What tends to distort the DJI index?

Source:
Thomas, L. (2015). In Boon to Its Stock, Apple Will Replace AT&T in Dow Index. The New York Times: Deal Book, March 7 (Retrievable online at http://www.nytimes.com/2015/03/07/business/dealbook/apple-to-replace-att-in-dow-index.html?rref=homepage&module=Ribbon&version=origin&region=Header&action=
click&contentCollection=Home%20Page&pgtype=article)

apple

So was it a good idea to sell out your customers’ trust?

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Fraud Accounting, Intermediate Accounting, International Accounting, Managerial Accounting, Video Updates.

When Lenovo preinstalled Superfish adware on its laptops, it betrayed its customers and sold out their security.

Questions:
1. What does this Superfish app do when you are on websites?
2. Do you agree that Lenovo needs to be fined or face legal prosecution?
3. Explain the following statements in financial or business terms: Lenovo sold its soul to the devil and forgot to get much in return. Homer Simpson would’ve made a better Faustian bargain.
4. Do you think Superfish is culpable for violation of any laws for its self-signed root certificate function?
5. Discuss this case in terms of corporate ethics.

Source:
Auerbach, D. (2015). You had one job, Lenovo. Slate, Feb. 20 (Retrievable online at http://www.slate.com/articles/technology/bitwise/2015/02/lenovo_superfish_scandal_why_it_s_one_of_the_worst_consumer_computing_screw.html)

Tax Fraud in South Florida? Surely you jest?

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

In North Miami, Josue Pierre took a shortcut into the easy-money underworld of tax fraud by using an “electronic filing identification number” — EFIN for short, and stolen IDs to file hundreds of fabricated online tax returns.

Questions:
1. Why does Assistant U.S. Attorney Michael Berger say that using EFINs is like “tax fraud on steroids”?
2. According to the article, what are the restrictions placed upon obtaining an EFIN?
3. In your opinion, which of the following was the best fraud story in this article? Why?

Source:
Weaver, J. (2015). Ripping off your refunds: One little number fuels South Florida’s tax-fraud explosion. Miami Herald, Feb. 22 (Retrievable online at http://www.miamiherald.com/news/local/crime/article10931081.html)
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Is the use of videoconferencing one to improve recidivism or profits?

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting.

Jails are replacing face-to-face visits with video conferencing screens and are passing the costs on to inmates and their families. In some cases, these costs are up to $1 per minute.

Questions:

1. Where do most videoconferencing companies make their money?
2. Who are the industry giants in prison videoconferencing?
3. Explain the last statement of the article in terms of the videoconferencing offered in prisons: ”What’s being billed as a curb against recidivism could also keep the jails full.”
4. What Federal Communications Commission (FCC) past and proposed regulations have and may soon intervene on telephone and videoconferencing profits?
5. Develop a cost/benefit analysis of the use of videoconferencing for prisons. What is your conclusion?

Source:
Murphy, T. (2015). Prison Phone Companies Have Found Yet Another Way to Squeeze Families for Cash. Mother Jones, Feb. 24 (Retrievable online at http://www.motherjones.com/politics/2015/01/jail-prison-video-visitation)
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Let the Punishment Fit the Crime

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Statement Analysis, Fraud Accounting, Intermediate Accounting, Managerial Accounting.

The Mikado explains his ambition of letting the punishment fit the crime in Gilbert and Sullivan’s classic work. The Mikado’s song could be the new theme song of the Securities and Exchange Commission, if dissenting commissioners prevail. The debate over a “one size fits all” penalty for misconduct is at the heart of what defines “upon showing good cause” and waivers for even misconduct by “bad actors” trading certain securities. Some commissioners feel that recent punishments are not tailored to the violation but instead treat every transgression equally.

Questions:

1. More specifically, what issue has been nagging the S.E.C. for the last year? Explain in one paragraph.
2. Explain the SEC’s financial crimes enforcement against Oppenheimer.
3. Oppenheimer has been the subject of how many regulatory violation actions? What are some of these for?
4. Do you believe that prohibiting waiver grants to “bad actors” allows the S.E.C. to fit the punishment to the crime? Why or why not?

Source:
Henning, Peter (2015). The S.E.C.’s Hazy Approach to Crime and Punishment. The New York Times, Feb. 9 (Retrievable online at http://dealbook.nytimes.com/2015/02/09/the-s-e-c-s-hazy-approach-to-crime-and-punishment/)

Fraud at Florida-based adult entertainment businesses

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Uncategorized.

Paul Anthony Ruggieri, accountant, pleaded guilty Friday to assisting in the tax fraud scheme of Anthony Andreozzi, the owner of two Florida-based adult entertainment businesses.

Questions:
1. Based on the information in the article, how long had Mr. Ruggieri been Andreozzi’s accountant? Go to the Certified Fraud Examiner’s website and compare this amount of time to the average number of months for most fraud. Is it more or less? Discuss.
2. What was the fraud that Ruggieri committed?
3. How much income did Ruggieri hide and was Ruggieri the only one charged in this case?
4. What is Ruggieri’s potential sentence?
5. What makes this type of business susceptible to fraud?

Source:

Lincoff, S. (2015). Former accountant pleads guilty to cooking the books for adult entertainment businesses. South Florida Business Journal, Feb. 17 (Retrievable online at http://www.bizjournals.com/southflorida/news/2015/02/17/former-accountant-pleads-guilty-to-cooking-books.html)

Profits or Ethics? Is it one or the other?

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting.

In November 2014, allegations of altered reports prompted a federal judge overseeing more than 1,000 hurricane related lawsuits in the New York City area to order and investigate all drafts of the engineering reports regarding 2012 Hurricane Sandy property damage. Based on these reports, the judge believed that engineering revisions were “widespread” in order to minimize payments to New Jersey and New York property holders.

Questions:
1. How many doctored engineering reports have already been found?
2. Why do engineering firms have an incentive to produce reports favorable to insurance firms?
3. What type of inquiry does Attorney General Schneiderman plan to make? What parties could potentially be charged?
4. What federal agency also plans an inquiry?
5. How was this widespread scam discovered?
6. What is racketeering and how do you explain this as a charge in the Dwecks’ claim?
7. Discuss the ethics of all the cases mentioned in the article.

Source:
Chen, David (2015). Hurricane Sandy Victims Say Damage Reports Were Altered. The New York Times, Feb. 16 (Retrievable online at http://www.nytimes.com/2015/02/17/nyregion/hurricane-sandy-victims-say-damage-reports-were-altered.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0)

SANDYINSURANCE2-articleLarge

Are you getting what is advertised?

Posted by & filed under Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Fraud Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

Four major retailers were accused by the New York State attorney general’s office of selling fraudulent and potentially dangerous herbal supplements. The attorney general demanded that they remove the products from their shelves.

Questions:
1. Who were the four national retailers?
2. What were the results of tests performed on the supplements?
3. In summary, what were the charges made by Attorney General Schneiderman in the “cease and desist letter” sent to the retailers? What are “cease and desist letters”?
4. What type of information did Attorney General Schneiderman request regarding the manufacture of the supplements in question?
5. What is DNA bar coding and why is it important in fraud investigations?
6. Based on your opinion, does Senator Orin Hatch appear to be “independent in fact or appearance” regarding the federal law process that exempt supplements from the FDA approval process for drug approvals? Discuss.

Sources:

O’Connor, A. (2015). New York Attorney General Targets Supplements at Major Retailers. The New York Times, Feb. 3 (Retrievable online at http://well.blogs.nytimes.com/2015/02/03/new-york-attorney-general-targets-supplements-at-major-retailers/)

PBS Video. (2015). The News Hour, Feb. 3 (Retrievable online at https://www.youtube.com/watch?v=eMzq7iItaOI)

A Big Bet!

Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting.

Pfizer is making a $15.2 billion bet on the drug industry’s new, more elite class of generics, which are costly, complex copies of already expensive biotech drugs.

Questions:
1. What are biosimilars?
2. Why are there questions about the durability of the market for these specialty drugs?
3. What is the dollar estimate of the 2020 market for biosimilar drugs?
4. Explain the price that Pfizer has offered for Hospira, including share price, debt, and earnings before interest, taxes depreciation and amortization.
5. Why does the deal come at a critical time for Pfizer? What is the prediction for Pfizer’s future?
6. What types of risks come with the purchase of Hospira?

Source: Gelles, D. and K. Thomas. (2015). Pfizer Bets $15 Billion on New Class of Generic Drugs. The New York Times, Feb. 5 (Retrievable online at http://dealbook.nytimes.com/2015/02/05/pfizer-to-buy-hospira-a-drug-maker-for-15-2-billion-in-cash/?action=click&contentCollection=Business%20Day&region=Footer&module=MoreInSection&pgtype=article)

06DRUG-blog480 Hospira Headquarters in Illinois