Skip to Main Content

Volume 8 Issue 3

IMA Educational Case Journal
ISSN 1940-204X

Articles

David Hurtt, Baylor University
Bradley Lail, Baylor University
Michael Robinson, Baylor University
Martin Stuebs, Baylor University

THIS CASE CHALLENGES STUDENTS’ ABILITY TO JUSTIFY DIFFICULT accounting choices and subsequently consider the ramifications of those choices. We provide two different scenarios that examine the responsibilities, incentives, and issues faced by accountants—the gatekeepers in many reporting environments. The first scenario is a familiar academic reporting task in which students assess group performance and allocate points to members. The second is a similar task within the segment reporting environment in which costs are allocated to the reporting units. A summary exercise then requires students to link these scenarios. The open-ended nature of the case allows its use in multiple courses and at various levels of accounting education. Ultimately, the case will encourage students to behave more like managers, make tough choices where guidelines are vague, and assess the consequences of their actions.
Keywords: allocations, decision justification, ethical dilemmas, group projects, segment reporting, responsibility accounting.
Stephen C. Hansen, Naval Postgraduate School
Tom Albright, Naval Postgraduate School

HULA ISLAND IS A BOUTIQUE INTERNET SHOP THAT specializes in hand-painted glassware and Hawaiian-themed products. The company is a pure Internet shop without any brick-and-mortar stores. Internet advertising services offer Hula a variety of options, each with different pricing structures and outcomes. Management must use its resources wisely to generate sales, earnings, and cash flow. Students use their knowledge of Cost-Volume-Profit (CVP) relationships to make advertising decisions that impact short- and long-run profitability. Students then prepare cash budgets to support the timing of their advertising decisions.
Keywords: Cash flow, cash budget, breakeven, conversion, pay-per-click, search engine advertising auction.
Doug Kalesnikoff, University of Saskatchewan
Vince Bruni-Bossio, University of Saskatchewan
Suresh Kalagnanam, University of Saskatchewan

WEST COAST EQUESTRIAN ASSOCIATION (WCEA) IS THE DISGUISED NAME OF a real 35-year-old not-for-profit organization that provides support to equestrian sport and recreation. This case study is based on the personal experience of one of the authors who advised the organization on strategy and governance. The fraud depicted in this case is based on a real event that was reported in the local media. It took place in a small local organization where the financial executive left the country with more than a million dollars. By blending the issues from two real organizations into this case, we want to convey that: (1) trust is an important factor in every organization, especially small organizations that suffer from a lack of resources, and (2) not-for-profit organizations are especially vulner­able to fraud because the board of directors of not-for-profit organizations place a significant amount of trust on the executive director and other staff for the day activities and internal controls.
Keywords: Governance, not-for-profit organizations, fraud, internal controls.