Groupon Inc Research Paper Example | Topics and Well Written Essays - 500 words

Groupon Inc - Research Paper Example It has resulted into numerous restatements of financial statements. Any material weakness means internal controls were ineffective and not able to detect misstatements or irregularities. This weakness was cited by the accounting firm as the cause of its revised earnings and revenues. An audit exception like that cited by Ernst & Young regarding the refund policy of the Groupon company is the cause of the inaccuracies in its financial statements. It is considered as a â€Å"material weakness† because the weakness is big enough or serious enough to impact the overall accuracy of the audited financial statements prepared by Ernst & Young. This particular ruling is contained under Auditing Standard No. 5 which states the requirements to be met by a firm to assess its managements effectiveness in instituting internal controls with regards to the financial reporting integrated with an audit of its financial statements.2 The crucial issue therefore causing the material weakness is the inability of Groupon to accurately predict the approximate amount of refunds it will give to customers who did not avail of promos based on varying coupon prices. It is a serious issue that impacts earning per share resulting in the stock price sliding 7% in a day. A monetary unit sampling (MUS) is a very useful method used by auditors to determine if a particular financial account is fairly stated.3 In the case of Groupon, the auditors must have a feeling its refund account is not stated accurately enough. The executives at Groupon admitted its difficulty with regards to estimating accurately the amount of refunds it will have to pay out due to the refund behavior of customers which started to shift or change around the year 2011 as a result of the company introducing higher-priced deals. This change in its mix of product deals means a requirement for increases in its reserve fund to deal with the higher-priced deals being unavailed and returned by some

Econometrics Assignment Example | Topics and Well Written Essays - 750 words

Econometrics - Assignment Example It therefore demonstrated beyond any reasonable doubt that the availability of married females in the work place was directly proportional to the size of their families. This could be explained by the competition for time brought about by the existence of families, Such that the woman had to make a choice between taking care of the family and coming to work. Question B The estimated logit model had a lot of resemblance to the LMP in terms of statistical significance and estimated coefficients. The few deviation (variations) were identified in cases where the females involved had some sought of secondary education. Weather this was as a result of better time management skills learnt in school or not is a subject of debate which can be investigated further but what is certainly true is that the level of education had an impact on the availability of married females at the work place. Question C An increase in a married female’s education had a substantial impact on the estimated logit model. The deviation from the logit model caused by an increase in female’s education was up to a maximum of three and a minimum of one. This was very evident from the resultant patterns plotted by the graphs. This confirmed the previous hypothesis that the level of education of a married female had a significant impact on their availability in the work place. The amount of money earned by other family members in the family was found to have a marginal impact on the logit model but the impact was not of statistical significance. It therefore appeared as though the amount of time the women put in to their work did not depend on the availability or increase of other sources of income brought into the family by other members of the family. Regression Model 2, Question D The Tobit model was to investigate weather the various variables had an impact on the amount time married women spent at work. The main variable to be investigated here was the size of the families that th ese females were responsible over. The model and the associated variable focuses on the availability of married females in the labor force, it was expected that their level of availability would be dependant on the size of their families indicated by the number of children they had. Such that, the more the children, the bigger the family thus less participation at the work place. On the logit model, the inlf coefficient was therefore expected to be inversely proportional to the kid_s and kid_m coefficients. The expected signs were realized and they were of statistical significance. The coefficients demonstrated the effect of large families on the amount of hours married females spent at work. It was noted that women with relatively smaller families spent more time at work than those with larger families. Question E There was statistically significant difference in the estimated coefficients between the Tobit and the OLS estimations which were very much expected. The differences were evident I both the signs they plotted and the magnitude of those signs. This led to the confirmation of the previously stated hypotheses namely, that is increased education and reduced families enhanced the availability of married females at work. The other hypothesis was that increase in alternative incomes by other family members had a negative impact on the availabili