IMA Educational Case Journal
Volume 5, Issue 4
The Tennessee Valley Authority: The Cost of Power
Bob G. Wood; Steven B. Isbell; Cass Larson
THE TENNESSEE VALLEY AUTHORITY (TVA) MUST MAKE A strategic decision to ensure sufficient power generation while at the same time continuing to provide affordable power to a growing number of customers in its service area. Complicating the decision is that TVA is faced with replacing a significant part of their existing power generation capability. Potential sources of new power generation include the construction of nuclear, natural gas, coal, and renewable energy production plants or the purchase of power needs from other electricity producers. The power generation options have highly differing costs, expected cash flows, and useful lives. Moreover, any construction decision is constrained by a limited capital budget. Not simply a financial decision, any strategy must also consider the political, social, and environmental impacts of the choice. Further complicating any decision is changing technologies and the complicating factors of their integration.
Keywords: capital budgeting, power generation, energy, green technology, and smart grid.
Alchemy – An Internal Auditing Case
Herbert Snyder; James Clifton; William Bowlin
AUDITING ALCHEMY IS A MULTIMEDIA INTERNAL AUDITING CASE CONCERNED with a possible inventory fraud in the firm’s manufacturing process. The company is a fabricated, simplified organization designed to introduce students to fraud investigation through active learning. The case is in three parts: analyzing production to look for evidence, observing the workplace to determine how a fraud could occur, and investigating individual employees to find a perpetrator. The case uses a variety of techniques, such as analytical procedures and net worth analysis, and requires students to observe a workplace and employee interviews through the use of a video walkthrough of the manufacturing facility. Students have the option of requesting and using supplemental information in the case as a means of determining a likely suspect. Deliverables are predication of fraud, weaknesses in the internal control system, a likely mechanism for the crime, suspect(s), and a final fraud report.
Keywords: fraud investigation, internal audit, inventory theft, and internal controls.
Unilever: The Financial Implications of Outsourcing IT Services in a Global Organization
Barbara E. Tarasovich
THIS CASE IS INTENDED FOR students in an undergraduate or graduate level course. At the undergraduate level, this case is suitable for a senior-level course such as a capstone senior seminar, current issues in accounting, business strategy, information technology, or managerial accounting special topics course. At the graduate level, this case can be used in managerial and cost accounting courses as well as in a business ethics, information technology, or capstone course. The case provides an introduction to the financial and business considerations which occur when outsourcing a business process to a third-party supplier. This is an actual case based on a real decision and information made available by Unilever, a Global 200 company. Students analyze the information, financial project costs, and projected savings of a project to outsource part of the IT function to a third-party supplier. Students are asked to identify some of the business issues involved in outsourcing and identify any financial considerations.
Keywords: business process outsourcing, cost of ownership, project cost savings, and information technology.