Teaching Notes are available to Faculty Members on request. Send a request toeditor@irjaf.com

​​Mercy Hospital: A Case Analysis
Mark McCartney, Ronald Marden and Lawrence Kickham

This is a case study which describes an account (names, other facts changed to preserve anonymity) in which an internal auditor in a hospital setting, due to personal biases and a lack of objectivity, performed a substandard audit of a capital asset acquisition and violated several standards of the International Standards for the Professional Practice of Internal Auditing as well as the Institute of Internal Auditors (IIA) Code of Ethics.  Students use the Standards and Code of Ethics to form conclusions regarding shortcomings of this audit.  The International IIA Standards and Code of Ethics are online and easily read, with the Standards being twenty one pages in length and the Code of Ethics being two pages.  The case is designed to be taught in one class period.  Students are exposed to actual standards and required to employ the standards in their analysis of the case. 

Blue Mountain State University – A Case Study of Selecting Socially Responsible Contractors for a New Building
Steven A. Allen, Ramachandran Ramanan and Naomi Soderstrom

In a setting based on an actual university, students are faced with difficulties associated with non-financial metrics, and with integrating financial and non-financial metrics to arrive at a decision. The setting is construction of a new business school building, which required selection of sub-contractors. Sub-contractors were chosen based upon both social responsibility and financial aspects. Social responsibility aspects were determined through use of a questionnaire, which was subsequently scored by Monitoring Committee members. The average score was then used as the measure of social responsibility. The case challenges students to evaluate the (flawed) algorithm for combining financial and social responsibility factors and to design a new system. This case illustrates an issue that arises in many settings where different qualitative and quantitative factors must be combined to make a decision.

Big Training Corporation: An Instructional Case for Courses In Forensic Accounting, Auditing, Fraud Examination and Cost Accounting
Dr. Robert L. Hurt

This case study discusses an actual case of attempted asset misappropriation in an organization focused on training and development activities.  The names of the parties involved have been disguised; likewise, the dollar amounts.  A department manager attempted to change employee work assignments and training opportunities offered to clients in an effort to maximize salaries earned by employees while potentially decreasing organizational profits significantly.  Students have the opportunity to:  (a) analyze the case through the lens of the Association of Certified Fraud Examiners taxonomy of occupational fraud and abuse, (b) comment on the ethical issues raised by the case and (c) conduct a sensitivity analysis of costs, revenues and profits.

Omega Tech Case: Putting it all together
Patricia Derrick

Intermediate accounting students often have difficulty “connecting the dots” with the large amount of technical information covered in class, which is traditionally taught as separate topics.  This case attempts to assist students to recognize the interconnectedness of capital leases, defined benefit pension plans, deferred taxes, fixed asset transactions, and cash flows through the correction of errors, and preparation of financial statements.  Students are also required to prepare disclosures relating to the transactions.   

Privatization: Chicago Parking Meters, LLC
Dr. Michael Tucker

In late 2008 a Morgan Stanley consortium submitted the winning bid for a 75 year concession on the revenues from Chicago’s 36,000 parking meters. The sale of the parking concession was motivated by Chicago’s need for money to close a budget gap. Privatization of Chicago’s parking did not please everyone. Alderman Scott Waguespack calculated that the city was giving up $4 to $5 billion in projected revenues. Just what the future revenues would be and what discount rate to apply to them to calculate their present value were contentious issues. The analysis requires calculating gains to the winning bidder and second guessing Mayor Daly’s decision to make the sale.

The Dolphin Bay Development: Optimum Strategy using Network Analysis
Prof. Malcolm Smith

This case study provides the opportunity to demonstrate the usefulness of network analysis in relieving bot¬tlenecks and reducing levels of uncertainty in complex projects with interdependent events.

Pacific Health Care: What should the Controller do?
Kenneth Danko and William Hefter

The protagonist in this case was recently hired by a non-profit organization that provides needed health care services. They are in the midst of a financial crisis which may only be temporary. He is asked to alter the accounting records for a short period of time to avoid bankruptcy. The situation presented in the case is intended to get students to think about the ethical trade-offs in an environment where the “greater good” may actually be achieved by complying with the CFO’s request to alter the records since the health, and even the lives, of some clients may be at risk if the organization were to fail. This case was designed specifically to encourage students to consult the AICPA Code of Conduct and the IMA Statement of Ethical Professional Practice and integrate these standards into their analysis of the case. 

Manufacturas Lizard
Prof. Francisco López Lubián

In early June 2011, Julio Hernández, general manager of the company Plásticos Reales S.A. (PERESA), decided that he had better devote most of his time over the next few days to preparing for an upcoming meeting. This was due to take place on the 15th and would be an opportunity for PERESA to make a counter-offer for the purchase of Manufacturas Lizard S.A. by proposing a revised price for the company.

The Case of the Drifting Exchange Rate
Allen B. Atkins, Roxanne Stell and Larry Watkins

Randy Bozarth loosened his grip on the tiller of his sail boat and let the bow turn slowly into the breeze.  Soon the craft nosed into the wind and was virtually dead in the water giving Randy time to think about what had been troubling him for days now.  If only he had taken an international finance course rather than wasting his time on “fun” electives when in college.  But that was in the past and if he had learned anything so far in life it was you cannot change the past.

Sunset Medical:  A Statement of Cash Flow Case
Scott Wandler and Kevin Watson

Sunset Medical is based on a real situation occurring at an Orthopedic Medical practice in Colorado. While attending a trade show Dr. Jones, the managing partner at Sunset Medical, was approached by a medical consulting firm, Physicians Medical Inc. (PMI), to provide the practice billing and administrative services. Dr. Jones decided to hire PMI and signed a contract in February of 2011.  Based on the interim financial statements that were released in June of 2011, Dr. Jones gave PMI control of the overall day to day operations of the practice. PMI immediately relieved the office manager of her duties and took over all operations of the practice. In early 2012, the 2011 financial statements were released and were not as impressive as the mid-year results. Dr. Jones is now worried that the increased power given to PMI may have been a mistake and has asked you to give a full assessment of the situation. The case is suitable for an introductory Financial or Managerial Accounting class at the M.B.A. level once the students have a working knowledge of the financial statements. The students must critically evaluate contract language and financial statements to examine ethical dilemmas that face businesses. 

Integrating a New Business into the Financial Planning Process at Unilever
Dr. Barbara Magi Tarasovich

A new Controller in this case was recently hired by Unilever, a global 200 consumer products organization, to integrate a newly acquired business into Unilever’s financial planning process. The newly acquired organization was a publically held company and had its own existing financial processes and procedures. Financial planning and reporting are major company activities and finance and accounting professionals are expected to “get it right.”   The purpose of this case study is to get students to think about the difficulties and challenges of revamping existing financial processes and procedures and alert them to areas where other financial professionals have encountered difficulties so they can benefit from their experience.

BCE Inc. Privatization: Fact or Fiction?
Imed Chkir and Kaouthar Lajili

As he read his newspaper on the morning of March 29, 2007, Michael J. Sabia, CEO of BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), could not help but feel the pressure being raised a notch. Rumours had been rife for several weeks that a private investment company would attempt to acquire control of his corporation. Now, in a financial paper, he was reading more details confirming that talks between Bell Canada and the New York firm Kohlberg Kravis Roberts & Co. regarding the private buy-out were at an advanced stage. 

Antiock Hardware: An Inventory Case Study
Dr. Paul C. Schauer 

This case study presents a scenario where an error in the inventory valuation, that may prove to be significant, was found by the external auditor of a large wholesale hardware distributor during the course of their audit.  Since the objective of all audit clients is to obtain an unqualified opinion, the case focuses on the ability of the client to correct the error to the extent possible and the procedures the external auditor must perform in order to determine that the corrected inventory valuation is not materially incorrect.  The case also addresses the impact the detection of the error has on the external auditor’s opinion on internal control and the implications it has on the rest of the audit process.

The National Industries Group (NI): A Case Study
Turki Alshammari

National Industries Group (NI) is a well established multinational holding company located in Kuwait. Recently, NI has followed aggressive diversification strategy which was aimed to establish a much diversified industrial asset portfolio in a pre-established plan to outsource its income. Its operations now extend from Pakistan in the east to Morocco on the west. NI also has many enriched markets through many subsidiaries in Europe and North America. Meed Money magazine has ranked NI as the second largest publicly quoted industrial firm in the Middle East. NI enjoys a very ambitious administration with high level of expertise as they look for expanding the horizon of the company’s operations into other diverse industries. NI is still following its strategy of diversification into different industries keeping its limits into only interrelated portfolio of assets. NI now focuses on allocating 70% of its industrial investments in Kuwait and the GCC countries and 30% in other Arab and foreign countries.

Telecom Sector Financing in India: Case Study of Bombay Communications Limited (BCL)
Dr. Vikas Srivastava

The Indian Telecommunications network is the third largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world. The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for India’s resurgent India’s economic growth.

Micro-District Coal Heating Case Study
Douglas B. Reynolds, Jim Collins, and Xiaoqi Han

Energy determines economic development. Nowhere is this truer, than in the Fairbanks, Alaska’s energy market, where some of the highest energy costs in the world are experienced.  However, in a small isolated town, such as Fairbanks, there is currently only one main option for space heating energy, which is expensive fuel oil.  Other options have significant barriers to entry or pollution.  However, a coal option may work, but it is necessary to conduct a business/engineering analysis.  This case is about a proposed creation of a small, coal district-heating utility that would create a local market for space heating needs for Fairbanks, Alaska.  Different costs and benefits will be shown.  Upfront costs will be assumed by the utility so that residences and businesses have a smooth, easy-to-pay monthly bill.  The benefits of coal must be counted against the high costs of bringing in trucked natural gas, or other pollution problems.

Energy Efficient Refrigerator – Buying Decision: An Environmental Accounting Case
Henry Schwarzbach and Allan Graham

This case is designed to introduce students to the topic of environmental management accounting and provide experience in decision making with environmental costs and benefits. 

Brad’s Time for a Decision
Wayne G. Bremser and James L. Bierstaker

In the following case a new auditor feels under pressure to report time that does not exceed a high-stretch budget, even if the audit task takes more time than budgeted. It provides an opportunity for students to make a decision with ethical dimensions. Students also can debate whether the cultural setting makes a difference. It also reviews some budgeting concepts.

International Research Journal of Applied Finance

(ISSN 2229-6891)Since 2010(Online + Print journal)