(ACC325 Forensic Accounting)<\/strong><\/p>\nCermco produces and sells specialty customer relationship management (CRM) solutions to small and medium-size businesses in the United States and Canada. The company is more than 20 years old and has a steady, loyal customer base.<\/p>\n
A major reason for Cermco\u2019s success lies in the ability of its product to easily integrate with various accounting and ERP systems. As a result, even when clients upgrade their entire accounting systems to expensive ERP solutions, they continue to use Cermco\u2019s CRM because of its superior features.<\/p>\n
Annual revenues for Cermco\u2019s three most recent years are about $11 million (20X3), $7 million (20X4), and $3 million (20X5), respectively. Overall interest expenses and operating margins have remained a relatively constant percentage of revenues.<\/p>\n
Cermco attributes the decline in revenues to declines in market share as a result of natural client turnover and the entrance of many other small competing software companies into the market. Nevertheless, Cermco\u2019s CRM product continues to enjoy the highest industry ratings and a loyal customer base.<\/p>\n
Cermco\u2019s balance sheets for the most recent three years follow:<\/p>\n
CERMCO Balance Sheet December 31<\/p>\n
20X5 20X4 20X3<\/p>\n
Assets<\/p>\n
Current assets<\/p>\n
Cash and cash equivalents $390 $1,386 $2,603<\/p>\n
Short-term investments \u2014 \u2014 \u2014<\/p>\n
Net receivables 720 664 1,225<\/p>\n
Inventory \u2014 \u2014 \u2014<\/p>\n
Other current assets 412 469 892<\/p>\n
Total current assets $1,522 $2,519 $4,720<\/p>\n
Long-term investments 1,215 \u2014 \u2014 <\/p>\n
Property, plant, and equipment 76 258 454<\/p>\n
Goodwill 545 1,757 2,194<\/p>\n
Intangible assets 999 1,844 3,644<\/p>\n
Accumulated amortization \u2014 \u2014 \u2014 <\/p>\n
Other assets \u2014 \u2014 \u2014<\/p>\n
Deferred long-term asset charges \u2014 \u2014 \u2014<\/p>\n
Total assets $4,357 $6,378 $11,012<\/p>\n
Liabilities<\/p>\n
Current liabilities<\/p>\n
Accounts payable $469 $1,174 $1,436<\/p>\n
Short\/Current long-term debt \u2014 \u2014 600<\/p>\n
Other current liabilities 1,227 1,358 1,496<\/p>\n
Total current liabilities $1,696 $2,532 $3,532<\/p>\n
Long-term debt \u2014 \u2014 \u2014 <\/p>\n
Other liabilities \u2014 \u2014 \u2014 <\/p>\n
Deferred long-term liability charges \u2014 \u2014 \u2014 <\/p>\n
Minority Interest \u2014 \u2014 \u2014 <\/p>\n
Negative goodwill \u2014 \u2014 \u2014 <\/p>\n
Total liabilities 1,696 2,532 3,532<\/p>\n
Stockholders’ equity<\/p>\n
Misc. stock option warrants \u2014 \u2014 \u2014 <\/p>\n
Redeemable preferred stock \u2014 \u2014 \u2014 <\/p>\n
Preferred stock 3,014 3,211 2,333<\/p>\n
Common stock 16 16 13<\/p>\n
Retained earnings \u201325,513 \u201323,814 \u201319,165<\/p>\n
Treasury stock \u2014 \u2014 \u2014 <\/p>\n
Capital surplus 25,168 25,564 25,862<\/p>\n
Other stockholders\u2019 equity \u201324 \u20131,131 \u20131,563<\/p>\n
Total stockholders\u2019 equity $2,661 $3,846 $7,480<\/p>\n
Produce a valuation estimate for Cermco for December 31, 20X5. Use whatever valuation method you think best but justify your choice. Note that you can estimate the annual income from year-to-year changes in the balance sheet.<\/p>\n
Unit 8 DB: Systems Development and Program Changes<\/strong><\/a> (ACC430 Accounting Information Systems) <\/strong><\/p>\nPer Chapter 16 Problem 6 Systems Development and Program Changes discuss the internal control weaknesses in the system development and program change procedures. Comments should relate to (but not be limited to) the organization structure, systems development, systems maintenance, internal audit participation, testing procedures, access controls, segregation of duties, program fraud and documentation inadequacies.<\/p>\n
6. SYSTEMS DEVELOPMENT AND PROGRAM CHANGES<\/strong><\/p>\nWinston Financial Services (WFS), located in Parsippany, New Jersey, provides financial advice to small and mid-sized businesses. Its primary opera tions are in portfolio management and financial services for clients in the health care industry. Each client has general business and financial information stored on servers in the main office in Parsippany. Client investment information is stored on a separate server in their Tulsa, Oklahoma, data center. This includes the total value of the portfolio, type of investments made, the income structure of each client, and associated tax liabilities. <\/p>\n
WFS had purchase specialized asset management software called VIEW, which allows the company to run analytics on client portfolios and to run simulations of market trends. The customization and implementation of VIEW was performed by a team of IT professionals from the consulting firm of Cutting Edge Solutions (CES).<\/p>\n
The contract with CES required them to train a WFS employee to maintain VIEW after the implementation. For this purpose, WFS selected a programmer from their systems maintenance group who was subsequently trained in VIEW\u2019s proprietary language and all of its functionality and controls.<\/p>\n
Two years after the implementation of VIEW, WFS management is now considering investing in a significant custom upgrade to the system. Furthermore, since their contract with CES has expired, they have decided to assign the upgrade task to their in-house maintenance programmer who had been trained in VIEW by CES. Once the project is completed, the programmer will be redeployed to the maintenance group. This is viewed by the WFS management team to be the most feasible and economic approach.<\/p>\n
Required<\/strong><\/p>\na. Discuss the risks associated with systems development approach.<\/strong><\/p>\nb. What controls weaknesses are apparent in this approach?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Week 8 Discussion Forum (MKT6920 Marketing Management) Discuss with your classmates the importance of marketing and what you learned in this class that you can apply for your future career and\/or business opportunities. Week 8 Discussion Forum (MGT5430 Organizational Behavior) What contributions can high self-monitors make in organizations? Low self-monitors? What do you think […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[183],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/6185"}],"collection":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/comments?post=6185"}],"version-history":[{"count":0,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/questions\/6185\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/media?parent=6185"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/disciplines?post=6185"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/paper_types?post=6185"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.goodacademic.com\/blog\/wp-json\/wp\/v2\/tagged?post=6185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}