Posted: October 29th, 2022

ACC 542 University of Phoenix Organizational Report to Stakeholders Discussion

ACC 542 University of Phoenix Organizational Report to Stakeholders Discussion
ACC 542 University of Phoenix Organizational Report to Stakeholders Discussion
Assignment Content
Read the Case Study 1-21 Organizational Reports to Stakeholders on pages 29-30 in Core Concepts of Accounting Information Systems.
Write a 45- to 175- word response to each of the six questions in the case study. Responses must be in your own words.

1-21. Organizational Reports to Stakeholders

The annual report is considered by some to be the single most important printed document that companies produce. In recent years, annual reports have become large documents. They now include sections such as letters to the stockholders, descriptions of the business, operating highlights, financial review, management discussion and analysis, segment reporting, and inflation data as well as the basic financial statements. The expansion has been due in part to a general increase in the degree of sophistication and complexity in accounting standards and disclosure requirements for financial reporting.The expansion also reflects the change in the composition and level of sophistication of users. Current users include not only stockholders but also financial and securities analysts, potential investors, lending institutions, stockbrokers, customers, employees, and (whether the reporting company likes it or not) competitors. Thus, a report that was originally designed as a device for communicating basic financial information now attempts to meet the diverse needs of an expanding audience.Users hold conflicting views on the value of annual reports. Some argue that annual reports fail to provide enough information, whereas others believe that disclosures in annual reports have expanded to the point where they create information overload. The future of most companies depends on acceptance by the investing public and by their customers; therefore, companies should take this opportunity to communicate well-defined corporate strategies.

RequirementsThe mission of the US SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Identify several ways that the SEC accomplishes its mission.The goal of preparing an annual report is to communicate information from a company to its targeted users. (a) Identify and discuss the basic factors of communication that must be considered in the presentation of this information. (b) Discuss the communication problems a company faces in preparing the annual report due to the diversity of the users being addressed.Select two types of information found in an annual report, other than the financial statements and accompanying footnotes, and describe how they are useful to the users of annual reports.Discuss at least two advantages and two disadvantages of stating well-defined corporate strategies in the annual report.Evaluate the effectiveness of annual reports in fulfilling the information needs of the following current and potential users: (a) shareholders, (b) creditors, (c) employees, (d) customers, and (e) financial analysts.Annual reports are public and accessible to anyone, including competitors. Discuss how this affects decisions about what information should be provided in annual reports.

1-22. North Gate ManufacturingNeil Rogers is the controller for North Gate Manufacturing (NGM), a company with headquarters in College Station, Texas. NGM has seven concrete product plants located throughout the Southwest region of the United States. The company recently switched to a decentralized organizational structure. In the past, all revenues and expenses were consolidated to produce just one income statement.Under the new organizational structure, each plant is headed by a general manager, who has responsibility for operating the plant like a separate company. Neil asked one of his accountants, Scott McDermott, to organize a small group to be in charge of performance analysis. This group is to prepare monthly reports on performance for each of the seven plants. These reports consist of budgeted and actual income statements. Written explanations and appraisals are to accompany variances. Each member of Scott’s group has been assigned to a plant and is encouraged to interact with management and staff in that plant to become familiar with operations.After a few months, Neil began receiving complaints from the general managers at several of the plants, claiming that the reports were slowing down operations and they felt like someone was constantly “looking over their shoulders” to see if they are operating in line with budget. They pointed out that the performance analysis staff is trying to do its job (i.e., explanation of variances). The most vocal plant manager claimed that “those accountants can’t explain the variances—they don’t know anything about the industry!”The president of NGM, Ross Stewart, also complained about the new system for performance Assessment reporting. He claims that he is unable to wade through the seven detailed income statements, variances, and narrative explanations of all variances each month. As he put it, “I don’t have time for this, and I think much of the information I am receiving is useless!”

RequirementsIs it a good idea to have a special staff in charge of performance Assessment and analysis? Explain.In a decentralized organization such as this one, what would seem to be the best approach to performance Assessment?What information would you include in a performance Assessment report for Mr. Stewart?

READINGS AND OTHER RESOURCES

Camgeni, M.P. 2015. Staying a step ahead: Internal audit’s use of technology. The IIA Research Foundation. Download from theiia.org.Collins, J.C. 2017, January. Data mining your general ledger with Excel: Learn how to use Microsoft’s ubiquitous spreadsheet application to unlock the wealth of information stored in your company’s financials. Journal of Accountancy 223(1): 27.Drew, J. 2015, October. CPAs: Criminal-pursuing agents. Journal of Accountancy 220(4): 54.Drew, J. 2016, June. Should CPAs switch to Windows 10 or Office 2016? The JofA’s annual gathering of accounting technology experts examines the newest major Microsoft releases and identifies the most exciting technologies on the horizon. Journal of Accountancy 221(6): 48.Tysiac, K. 2016, November. New path for CPAs in cyber risk management: AICPA proposals would guide companies in designing and describing cybersecurity risk management programs and create a ’cybersecurity examination’ engagement. Journal of Accountancy 222(5): 16.

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