Volume 6 Issue 2
IMA Educational Case Journal
M. Elizabeth Haywood
THE PURPOSE OF THIS CASE IS TO IDENTIFY INTERNAL CONTROL WEAKNESSES relating to business entertainment and travel expenses and then to ascertain why these actions also violate ethical standards of behavior. While the case reads like a fictional short story, we incorporated actual violations at a Fortune 500 company into the case details. The case requires students to refer to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management (ERM)—Integrated Framework (2004) to identify the internal control weaknesses listed in the case, to provide recommendations to prevent or minimize their recurrence in the future, and to classify the ethical violations in accordance with the standards of competence, confidentiality, integrity, and credibility of the IMA® (Institute of Management Accountants) Statement of Ethical Professional Practice. Student feedback demonstrates that the case is an interesting and useful learning tool in discussing internal controls and ethical issues.
Keywords: internal controls, ethics, ethical standards, and business entertainment expenses.
Product Costing at Fine Foods: Is it a Symptom or the Problem?
Gary M. Cunningham
Gary M. Cunningham
THIS CASE FOCUSES ON ISSUES THAT APPEAR TO BE problems but are symptoms of more fundamental problems. These are common issues in management accounting and management control situations. It also provides a good overview of product costing and performance evaluation, accounting for special orders, and agency costs and benefits including non-quantifiable costs and benefits. The case is based on an actual food processing company that had these issues. It can be used to cover manufacturing accounting in many other contexts as well.
Keywords: symptoms vs. problems, product costing, performance evaluation, special orders, non-quantifiable agency costs and benefits.
A Partnership with Unlimited Possibilities: A Case of Allocation of Partnership Income and Common Costs
Marc I. Lebow
MOST CASES ARE WRITTEN FOR UPPER- AND GRADUATE-LEVEL ACCOUNTING CLASSES, HOWEVER, this case was written to be used in introductory accounting classes. It involves a recent college graduate who, while eating lunch, is asked by a potential client about the benefits of entering into a partnership. Three issues must be addressed: are the risks of entering the partnership worth the increase in income; is the partnership allocation formula fair to the potential partner; and should the common costs be allocated differently? Students need to use the accounting information provided and advise the client about making important business decisions. The student has to write a memo explaining the benefits and risks of joining the partnership. The facts of the case add a real-world element to this discussion.
Keywords: partnership, allocation of income, accounting cases, profit sharing, writing across the curriculum (WAC).