Cracking The Case
Cracking The Case
THE CASE
Prepare for Internship
What is a case?
What are companies looking for in the case interview?
Process for Solving Cases
Clarify
Structure
Analyze
Conclude
Example Case
Note:
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donot copy and use for other purposes.
What is a case?
Hypothetical, open-ended
business issue or dilemma
Combination of
Types: Verbal Case Written Case
Verbal/Written
If you do not structure your analysis, you will miss critical issues
that need to be explored!
Process for Solving Cases - Structure
` Porter‟s 5 Forces
Competitive Strategy
` SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
DOs DON’Ts
` Relax – Take a deep breath before you start ` Don‟t jump to an answer right away
` Take your time (within reason) - Once the ` Don‟t make assumptions without
interviewer gives you the problem, ask for clarifying with the interviewer
few minutes to structure your approach ` Don‟t worry about the right answer,
` Listen to your interviewer – ensure worry about the right approach
understanding and take hints ` Don‟t exclusively rely on pre-made
` Think out loud – make sure your thought frameworks – modify or develop your own
process is structured whenever possible
` Be concise – Once you have identified ` Don‟t appear frustrated or flustered
underlying problems, begin to formulate
possible recommendations
` Ask logical questions - The interviewer will
only provide information if you ask. Make
sure your questions follow your structure
` Be confident without being arrogant
Example Case
CASE 01 (Accounting)
Sanjay Motors is a trading and servicing company and its fiscal year ends
at 31 December 2016. The Company has total receivable outstanding at
that day of $500,000. A receivable accountant gives a review of the
receivables balances
and highlights two following problems.
A, One of its customers, Mann Co, has gone bankrupt. Mann Co bought a
car cost $50,000 but only paid $36,000. The rest amount is now considered
irrecoverable.
B, At 1 November 2016, Sanjay Motors is owned $20,000 by Jackson for
servicing and repair work carried out on Jackson‟s fleet of motor vehicles.
Of the $20,000 outstanding, $3,500 relates to work that Jackson feels was
substandard. Despite of discussions and negotiation, and although Jackson
is generally a „good customer‟, Sanjay is doubtful that Jackson will ever pay
this
$3,500.
At 1 January 2016, Sanjay Motors had an allowance for receivables of
$18,000 and it wishes to set up a general allowance of 2%.
Required:
(i) How should the accountant do in this circumstance?
(ii) Explain the impact on Financial Statements should the issue remain
unresolved.
CASE 02 (Accounting)
Binh Minh Company operating in manufacturing sector has its fiscal ended
31 December and monthly depreciation policy.
a) On February 1, 2013, company started to build a new warehouse. The
accountant recorded all the cost of VND 240 million at that date to Tangible
Non-current assets account, and started to depreciate it from this date with
the rate of 5% per annual. This new warehouse was completed and used
from July 1, 2016.
b) On August 1, 2016, the company bought a new machine for sales
department at a cost of VND 26.4 million (included VAT 10%). A newhired
accountant recorded it as a non-current asset and depreciated it using
straight-line method with the rate of 20% per year.
Required:
- Comment on the acceptability of the accounting treatment and disclosure
as indicated above.
- Explain the impact on Financial Statements should the issue remain
unresolved.
- Adjust all the occurred error
Case 03 (Auditing)
Hexa Ltd operates a chain of food wholesalers across the country and its
year end was 30 September 2016. The final audit is nearly complete and it
is proposed that the financial statements and audit report will be signed on
13 December. Revenue for the year is £78 million and profit before taxation
is £7.5 million. The following event has occurred subsequent to the year
end.
A customer of Hexa Ltd has been experiencing cash flow problems and its
yearend balance is £0.3 million. The company has just become aware that
its customer is experiencing significant going concern difficulties. Hexa
believe
that as the company has been trading for many years, they will receive
some, if not full, payment from the customer; hence they have not adjusted
the receivable balance.
Required
(i) Discuss whether the financial statements require amendment;
(ii) Describe audit procedures that should be performed in order to form a
conclusion on the amendment; and
(iii) Explain the impact on the audit report should the issue remain
unresolved.
Case 04 (Auditing)
Helicopter Ltd operates a chain of food wholesalers across the country and
its year end was 30 September 2016. The final audit is nearly complete and
it is proposed that the financial statements and audit report will be signed
on 13 December. Revenue for the year is £78 million and profit before
taxation is £7·5 million. The following event has occurred subsequent to the
year end.
A key supplier of Helicopter Ltd is suing them for breach of contract. The
lawsuit was filed prior to the year end, and the sum claimed by them is £1
million. This has been disclosed as a contingent liability in the notes to the
financial statements; however correspondence has just arrived from the
supplier
indicating that they are willing to settle the case for a payment by Helicopter
Ltd of £0.6 million. It is likely that the company will agree to this.
Required
(i) Discuss whether the financial statements require amendment;
(ii) Describe audit procedures that should be performed in order to form a
conclusion on the amendment; and
(iii) Explain the impact on the audit report should the issue remain
unresolved.