...The University of Lethbridge Calgary Campus Faculty of Management Management 4430Y Financial Management Spring 2011 A.P. Palasvirta Office: Markin 4132, Lethbridge Phone: (403) 332-4582 e-mail: oz.palasvirta@uleth.ca Goal of Course Management 4430 is the capstone course in finance and will incorporate concepts you have learned in through your study of corporate, investments, and international. We will utilize the case methodology to focus our analysis. Cases describe a context in which a particular problem is found. Regardless of the particular characteristics of the problem, problem solving follows a general methodology: identification of the problem, describing the context of the problem, analysis of potential alternative solutions, the identification of the best solution, implementation of the best solution , and the creation of controls and contingency plans, if applicable. Text and Other Sources: E-book based on Case Studies in Finance, 6th ed., 2010, McGraw Hill, Toronto, ISBN Prerequisites Management 3412, Fundamentals of Investments Investments, Analysis & Management, 2nd Canadian Ed., 2005, Cleary & Jones, John Wiley & Sons Canada Ltd., Mississauga ISBN 0-470-83542-7 Management 3460, Corporate Finance Fundamentals of Corporate Finance, 6th Canadian Ed., 2007, Ross, Westerfield, Jordan, & Roberts, McGraw-Hill Ryerson, Toronto ISBN 13: 978-0-07-095910-1 A list of topics for which you should have working knowledge...
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...Bruner: Case Studies in Finance: Managing for Corporate Value Creation, 4/e IV. Capital Budgeting and Resource Allocation 17. The Investment Detective © The McGraw−Hill Companies, 2003 CASE 17 The Investment Detective The essence of capital budgeting and resource allocation is a search for good investments in which to place the firm’s capital. The process can be simple when viewed in purely mechanical terms, but a number of subtle issues can obscure the best investment choices. The capital-budgeting analyst is necessarily, therefore, a detective who must winnow good evidence from bad. Much of the challenge is knowing what quantitative analysis to generate in the first place. Suppose you are a new capital-budgeting analyst for a company considering investments in the eight projects listed in Exhibit 1. The chief financial officer of your company has asked you to rank the projects and recommend the “four best” that the company should accept. In this assignment, only the quantitative considerations are relevant. No other project characteristics are deciding factors in the selection, except that management has determined that projects 7 and 8 are mutually exclusive. All the projects require the same initial investment, $2 million. Moreover, all are believed to be of the same risk class. The weighted-average cost of capital of the firm has never been estimated. In the past, analysts have simply assumed that 10 percent was an appropriate discount rate (although certain...
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...great pain in the neck of many Nigerian bank managers. It has also become an unfortunate staple in Nigeria’s international reputation. Fraud is really eating deep into the Nigerian banking system and that any bank with a weak internal control system, is dangerously exposed to bank fraud. The CBN reported that cases of attempted fraud and forgery in banks, as at half-year 2007 have surpassed what was recorded for the whole year 2006. The CBN half-year report for 2007, revealed a total of 741 cases of attempted fraud and forgery, involving 5.4 billion, $35,406.1, 150 Euros were reported as at June, 2007. In 2006, 1,193 cases were reported involving 4.6 billion, $1.8 million and 14,389.7 pound sterling. The CBN also reported that the backward development was attributable to weaknesses in the internal control systems of the banks. This has clearly pointed the picture of how fraud has penetrated in the financial strength of Nigerian Banks. In a nut-shell, the damage which this menace, called fraud has done to the banks is innumerable and needs urgent attention. Therefore, the attempt to put an end to this economic degradation, gave rise to the topic of this research study the impact of...
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...| Issue: 4 | Page No.: 181-189 | | Impact of Internal Control System in Banking Sector in Nigeria | | Olaoye Clement Olatunji | | Abstract: The Central Bank of Nigeria reported that the backward development in Nigeria was attributable to weaknesses in the internal control systems of the banks. This has clearly pointed out the picture of how fraud has been penetrated in the financial strength of Nigerian Banks. In a nut-shell, the damage which this menace, called fraud has done to the banks is innumerable and needs urgent attention. Therefore, the attempt to put an end to this economic degradation, gave rise to the topic of this research study the impact of internal control in the banking sector in Nigeria with Wema Bank of Nigeria PLC as a case study. However, this study is aimed at verifying the conception that an effective and efficient internal control system is the best control measure for preventing and detecting fraud, especially in the banking sector. Data captured for this study, were analyzed through descriptive and inferential statistical methods. The descriptive analysis involves the use of percentages, tabulation and graphical presentation. While the inferential statistical method involved the use of the chi-square. The functions of fraud prevention, detection and control are interwoven, as the three works together to eliminate fraud and fraudulent tendencies. Therefore, internal control is highly significant in fraud detection and preventions in banking...
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...Abstract The first time that phone hacking scandal caught the attention from the general public was in November 2005, when Prince William’s knee injury, which was only known to few cronies, was exposed as news by News of the World. Former NOtW royal editor Clive Goodman was accused of hiring private detective Glenn Mulcaire for phone hacking activities. The major victims were celebrities, politicians, and members of the British Royal family. Later in 2006, both Goodman and Mulcaire were sentenced. The chief editor Andy Coulson then resigned from the newspaper. However, in July 2011, it was revealed that the phone of missing school girl Milly Dowler had also been hacked by a journalist from the News of the World. The messages in the voice mail box had been erased, which gave false hope survival to police and the girl’s family and potentially destroyed valuable evidences about the girl’s abduction and murderer. Within more and more , resulted in a public outcry against the News International. On the 8th of July, after the British Parliament’s urgent debate regarding the affair, British Prime Minister David Cameron announced that a public inquiry would look in to the scandal and that further investigations needed to be conducted. Due to advertisement boycotts and unrelenting public pressure, News of the World ended its 168 years publication on 10th of July. Eight days later, former News of the World reporter Sean Hoare was found dead. He was the first to allege phone hacking...
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... Chicken run This case is about small and medium sized enterprise (SME), Excel Poultry & Meat Sdn Bhd (EPM). Since 2005, EPM is a subsidiary of PCK Holding. Encik Selamat, a Certified Public Accountant (CPA), had been the General Manager of this company that located in Kluang, Johor. This case shows that EPM face management, production, financial and internal control problems. Besides that, this case also shown the conflict of General Manager with the main debtors of the company. Since 2008, this company faces bad financial performances because of lack of internal control. Other than that, this case also shows the external factors for the production process that cause "chicken run" crisis. Excel Poultry & Meat Sdn Bhd (EPM) was establish in 1998 as Small and medium sized enterprise (SME). EPM was started their business with an initial capital of RM 3.6 million and starting with twenty (20) employees. Their Core business is chicken farming and supplying to various outlets in Malaysia such as hypermarkets, restaurants, hospitals, hotels as well as university colleges. Currently EPM had more than two hundreds (200) employees within the organization and started positioning itself amongst the top five (5) chicken suppliers, in the mid-tier producers in the country. SMEs is the most important for Malaysian economic growth, so for that purpose we need make sure our SMEs had the excellent management in their financial and internal control.e would ...
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...(RICO) -Act that lists more than 30 different state and federal crimes for which the violation of any two in a related pattern over a 10-year period can lead to criminal and/or civil liability with criminal penalties of fines up to $25,000 and 20 years in prison; part of the Organized Crime Control Act (OCCA) of 1970. -The act was designed to combat organized crime, forbids certain organized gambling, and to allow the prosecution of criminal leaders who may not have been directly involved in a series of criminal acts but whose criminal organization carried out the details. 2. Benford’s Law (1)定义：A fraud indicator that predicts the relative incidence of first digits of numbers in certain types of random data. (2)Benford Analysis Benford analysis presents another interesting approach to fraud detection. Its general use is to determine the likelihood that fraud exists in records. This technique is based on Benford’s law, named after Frank Benford who realized that the likelihood that numbers 1, 2, 3, 4, 5, 6, 7, 8, and 9 will appear as the first digit in numbers occurring in a random data set conforms to a predictable pattern. That is, the number 1 is more likely to appear as the first digit in a number than is the number 2. The pattern of likelihood (Figure 6.6) continues with other digits: The number 2 is more likely to appear as a first digit than 3, 3 is more likely to appear as a first digit than 4, and so on. Note that just because the likelihood is higher that 7 will...
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...CASE STUDY The Investment Detective The essence of capital budgeting and resource allocation is a search for good investments in which to place the firm’s capital. The process can be simple when viewed in purely mechanical terms, but a number of subtle issues can obscure the best investment choices. The capital budgeting analyst is necessarily, therefore, a detective who must winnow good evidence from bad. Much of the challenges is knowing what quantitative analysis to generate in the first place. Supposed you are a new capital budgeting analyst for a company considering investments in the eight projects listed in Exhibit 1. The chief financial officer of your company has asked you to rank the projects and recommend the “four best” that the company should accept. Part I For the first part of this assignment only quantitative considerations are relevant. No other project characteristics are deciding factors in the selection, except that management has determined that projects 7 and 8 are mutually exclusive. All projects require the same initial investment, $2,000,000. Moreover, all are believed to be of the same risk class. The weighted average cost of capital for the first part is 10%. To simulate your analysis, consider the following questions: 1. Can you rank the projects simply by inspecting the cash flows? We cannot rank the projects by simply inspecting the cash flows. We must bring all cash flows at the same point in time (present) before...
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...MANAGING INFORMATION – CRITICAL EVALUATION OF RELEVANT ISSUES MODULE: MANAGING INFORMATION Table of Contents Sr. no. Contents Page no. 1. Introduction............................................................................................3 2. Definition of Information Systems...........................................................3 3. Information System as an Organizational and Management Solution.........3 4. Information Manager and Information System..........................................4 5. Environmental and Industrial Analysis.....................................................4 6. Recommended Information Systems for a Medium Sized Accountancy and Management Consultancy Firm........................................................5 6.1. Management Information System.............................................................5 6.2. Decision Support System..........................................................................6 6.3. Knowledge Management System..............................................................6 6.4. Transaction Support System.....................................................................6 6. Evaluation of Organizational, Technical and Management Aspects of the Information Systems Used.................................
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...Q&A Note: CPE will be offered for those that answer at least 4 (of the 5) polls presented during the webinar. 4 © 2012 ERPRA Introductions Jeffrey T. Hare, CPA CISA CIA: •Founder of ERP Risk Advisors / Oracle User Best Practices Board •Written various white papers on Internal Controls and Security Best Practices in an Oracle Applications environment •Frequent contributor to OAUG’s Insight magazine •Experience includes Big 4 audit, 6 years in CFO/Controller roles – both as auditor and auditee •In Oracle applications space since 1998 – as client and consultant •Founder of Internal Controls Repository •Author Oracle E-Business Suite Controls: Application Security Best Practices •Contributing author Best Practices in Financial Risk Management •Published in ISACA’s Control Journal and ACFE’s Fraud Magazine 5 © 2012 ERPRA Poll 1: Will you be needing a CPE Certificate? • Yes • No • Not Sure 6 © 2012 ERPRA GTAG 2 – What is it? •Global Technology Audit Guide: Change and Patch Management Controls: Critical for Organizational Success 7 © 2012 ERPRA Poll 2: How would you rate your Change Management maturity on a scale of 1 to 5 with 1 being not mature and 5...
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...that their need for forensic accountants surged following the rise of financial statement fraud. Forensic accounting involves a combination of accounting, auditing and investigating. There are some important skills that individuals going out for this position should have and the due diligence in this position is crucial. If pursuing the career of forensic accounting one should develop the necessary skills that will be used in the field. An individual should be analytical, investigative, possess the ability to interpret financial statements, ethically responsible, and hold effective communication skills. Each of these particular skills is important to the field, along with some others that are great in addition. Forensic accountants also should also need the general accounting knowledge in order to understand the information they are required to assess. The ability to analyze the data provided, such as financial statements, audit reports etc will help a forensic accountant figure out their next course of action. Since they are usually retained for court purposes or to resolve a dispute, breaking down the information is required to get a better understanding of the company or party in question. Every company is different and different industries may account for items in a different matter. Being able to break down the information one can understand how it was put together. It’s like analyzing a car, if you study it and take it apart piece by piece you should be able to put it...
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...Its most valuable asset will always be its people and the work they do. For Marks & Spencer, this means that the people who look after customers, select and merchandise the products and run the operations, must aspire to be the best qualified and equipped in retailing. This case study focuses on the challenging role of the Financial Manager behind the scenes at every Marks & Spencer store. In doing so, it highlights many of the qualities, such as leadership, adaptability and analytical consideration, required by Financial Managers every day in a busy retail environment. Working for a retailer Retailing is ‘the practice of selling goods in small quantities to the general public.’ It is a business where employees come face-to-face with customers every day. Customers can be very demanding - they enter a store and expect their needs to be met immediately, irrespective of whether the lorries delivering bakery goods are stuck in snow or that a key supplier is having production problems. Many businesses in different types of environment are able to keep their customers at arm’s length. If they need to do some training or catch up on paperwork, it is relatively easy to make time. This is not the case in a Marks & Spencer store. It is just not possible to ignore customer demands. This may often mean having to juggle many tasks at once, such as an accident on the sales floor, a customer complaint, a stock problem or a till breakdown. Retailing is renowned for its unpredictability...
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...Corporate Strategy Case Study Analysis WHAT IS CASE STUDY ANALYSIS? A case study presents an account of what happened to a business or industry over a number of years. It chronicles the events that managers had to deal with, such as changes in the competitive environment, and charts the managers' response, which usually involved changing the business- or corporate-level strategy. Cases prove valuable in a course for several reasons. First, cases provide you, the student, with experience of organizational problems that you probably have not had the opportunity to experience firsthand. In a relatively short period of time, you will have the chance to appreciate and analyze the problems faced by many different companies and to understand how managers tried to deal with them. Second, cases illustrate what you have learned. The meaning and implication of this information are made clearer when they are applied to case studies. The theory and concepts help reveal what is going on in the companies studied and allow you to evaluate the solutions that specify companies adopted to deal with their problems. Consequently, when you analyze cases, you will be like a detective who, with a set of conceptual tools, probes what happened and what or who was responsible and then marshals the evidence that provides the solution. Top managers enjoy the thrill of testing their problem-solving abilities in the real world. It is important to remember, after all, that no one knows what the right...
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...WorldCom Case Study1 By Dennis Moberg (Santa Clara University) and Edward Romar (University of Massachusetts-Boston) (The original of this document can be found at the Santa http://www.scu.edu/ethics/dialogue/candc/cases/worldcom.html#one. Clara University website at An update for this case is available at http://www.scu.edu/ethics/dialogue/candc/cases/worldcomupdate.html . Note that this update is not part of the syllabus for the PRM or Associate PRM exam. It is included for reference and explanation only.) 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. But none of these other companies had senior executives as colorful and likable as Bernie Ebbers. A Canadian by birth, the 6 foot, 3 inch former basketball coach and Sunday School teacher emerged from the collapse of WorldCom not only broke but with a personal net worth as a negative nine-digit number.2 No palace in a gated community, no stable of racehorses or multi-million dollar yacht to show for the telecommunications giant he created; only debts and red ink--results some consider inevitable given his unflagging enthusiasm and entrepreneurial flair. There is no question that he did some pretty bad stuff, but he really wasn't like the corporate villains of his day: Andy Fastow of Enron, Dennis Koslowski of Tyco, or Gary Winnick of Global Crossing.3 Personally, Bernie...
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...MBA Program Course: Financial Analysis and Decision Making MBA730 Instructor: Marlena L. Akhbari Wright State University Finance and Financial Services McGraw-Hill/Irwin =>? McGraw−Hill Primis ISBN: 0−390−42334−3 Text: Case Studies in Finance: Managing for Corporate Value Creation, 4/e Bruner This book was printed on recycled paper. MBA Program http://www.mhhe.com/primis/online/ Copyright ©2003 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw−Hill Primis text may include materials submitted to McGraw−Hill for publication by the instructor of this course. The instructor is solely responsible for the editorial content of such materials. 111 MBAP ISBN: 0−390−42334−3 MBA Program Contents Bruner • Case Studies in Finance: Managing for Corporate Value Creation, 4/e II. Financial Analysis and Forecasting 1 1 6 16 16 39 52 52 60 66 66 84 100 100 6. The Financial Detective, 1996 11. ServerVault: ‘‘Reliable, Secure, and Wicked Fast’’ III. Estimating the Cost of Capital 12. ‘‘Best Practices’’ in Estimating the Cost of Capital: Survey and Synthesis 15. Teletech Corporation, 1996 IV. Capital Budgeting and Resource Allocation 19. Diamond...
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