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Accounting - Managerial

Question One:
Discuss the pros and cons of implementing ISO 9000.

Question Two:
Distinguish between predatory pricing and penetration pricing. How are they similar and/or different?

Question Three:
In your opinion, has Sarbanes-Oxley effectively accomplished what the lawmakers intended when they wrote the law? Support your position.

Question Four:
What internal controls would you put in place for a small business with the sole proprietor and three employees in management (1 purchasing, 1 financial, and 1 sales)? Cash transactions are not significant.

Question Five:
List and describe the three sections that comprise a summary cash budget (Hint: What are the activities on a Statement of Cash Flows?) For each section, give two examples o a type of activity that would be shown in that section.

Solution Preview

1. Pros & Cons of ISO 9000

Pros:
* good quality management improves business, often having a positive effect on investment and market share
* implementing ISO 9000 also provides the following:
- the ability to create a more efficient, effective operation
- increased customer satisfaction and retention
- a reduced likelihood of audits
- employee motivation, awareness, and morale is improved

Cons:
* a significant amount of time and money is needed for registration
* some companies will rely too much on the certification and will put too much weight behind it and not focus on actual quality ...

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