Question #6 (25 points Total) APPLICATION OF TOPICS Pick one episode of Shark Ta
ID: 364568 • Letter: Q
Question
Question #6 (25 points Total) APPLICATION OF TOPICS Pick one episode of Shark Tank or The Profit (can be found on YouTube, etc). Tell me what the product was. Based on what you have learned in class, and regardless on if they invested or not, how would you advise the Sharks on what questions to as to make sure make a good decision with their money? Would like to see at least 3 things they should ask the presenters (and why it was important in the decision) AND 2 things that could have been improved or needs to be determined before they can decide to invest.Explanation / Answer
The Sarbanes-Oxley Act contains numerous internal control provisions. Here is a highlight of those:
Section 201 – Prohibits external auditors from performing non-audit services, such as book keeping, internal audit function, consulting, and systems design and so on.
Section 203 – Requires audit partners to rotate at least every five years from an audit they have been responsible for.
Section 302 – Requires a public company’s principal officers like the CEO and CFO to certify as to the accuracy and completeness including full disclosures of the company’s financial reports and thus the integrity of the reports.
Section 404 – Each annual report must contain an assessment of internal controls and state management’s responsibility for establishing and maintaining an adequate internal control structure.
Section 404 of SOX requires that public companies establish and maintain a system of internal controls, which in then audited by external auditors. The act requires that corporate officers namely the CEO and CFO annually certify that management is responsible for establishing and maintaining adequate internal controls over financial reporting and that those internal controls have been tested and assessed as to their effectiveness. This certification is explicitly stated in a report that must accompany financial statements filed with the SEC and must also include notations of significant defects or material noncompliance found in internal control testing. Additionally, the report must provide a statement regarding the external auditor’s attestation on management’s assessment of the company’s internal control over financial reporting.
Corporate Governance refers to the system by which a corporation is directed and controlled. The governance structure specifies the distribution of rights and responsibilities among a number of participants within a corporation, such as the board of directors and managers, and parties external to the corporation, such as shareholders, creditors, regulators, and the company’s external auditors. The governance structure further specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations establish and pursue their objectives while considering the social, regulatory and market environments in which they operate. Governance is a mechanism for monitoring an organization’s actions, policies and decisions.
Corporate governance begins with the company’s shareholders. The shareholders elect the board of directors, who then appoint the senior management of the corporation such as the CEO and the CFO. The primary purpose of the board of directors is to direct the operation of the corporation. The board is also responsible for monitoring and oversight. The CEO is the board’s agent responsible for managing the corporation on a day to day basis. The procedures for making corporate decisions are spelled out in the corporate bylaws.
A company’s organizational structure, policies, objectives and goals as well as its management philosophy and style, influence the scope and effectiveness of the control environment. The organizational structure defines lines of responsibility and authority. Formal communications about these lines of responsibility, as well as about control procedures, plays an important role in the organization’s overall adherence to internal controls.
Job order costing
Job order costing can provide very detailed results of a specific job or operation so it is ideal for specific jobs. For large processes, job order costing is less valuable because it is impractical to assign individual costs to mass produced items on a daily basis. Job order costing can accommodate multiple costing methods, such as actual, normal and standard costing, so it is flexible enough to be used by a wide variety of companies.
Job order costing can have a strategic value for a business because it gives a detailed breakdown of all of the different typ