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Global Ltd. Susan Richardson (University of Bradford Management Centre)

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Colin Drury, Management and Cost Accounting - Global Ltd

Global Ltd.
Susan Richardson (University of Bradford Management Centre)
This case study is taken from Ducker, J., Head, A., McDonnell, B., O'Brien, R. and Richardson, S. (1998), A Creative Approach to Management Accounting: Case Studies in Management Accounting and Control, Sheffield Hallam University Press, ISBN 086339 791 3. The author wishes to acknowledge Jayne Ducker and Tony Head for their editorial and developmental contributions to this case study and teaching note. Global Limited is a small company which supplies quality inspectors to the pipeline industry. The company's clients include some of the major plcs in the UK, such as the major petroleum and gas companies. The inspectors are required by these companies to provide an independent certification that the steel used in the construction of the pipes, which channel the gas and oil, meets the required standard. Additionally, inspectors are required to provide an independent certification that the joinings (known as 'welds') made when laying the pipelines are also made in accordance with industry standards. The pipelines are either laid under the ground or on the sea bed. Some inspectors are therefore required to work in rolling mills, inspecting the quality of steel and the production of the pipes, whilst others are required to work on installation sites, checking the welds. These locations can be anywhere in the world. The company is owned and managed by Alex and over the past few years the turnover has grown to £2.5 million. The company is financed solely by a bank overdraft. Alex operates out of offices within a prestigious Georgian property development in a northern town, on the basis of a sub-let from the company which rents the entire building. Since the operations of the company take place on clients' own sites, the building houses only

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