Chapter 13 Homework

foreign trade zones San Antonio, New Orleans, and the Port of Catoosa, Oklahoma, are examples of cities with foreign trade zones.

areas near a customs port of entry that are physically on U.S. soil but are considered to be outside U.S. commerce.

probability.

A common way to assess the likelihood of an inherent risk is to measure its

risk appetite.

An organization's overall desired level of risk taking is referred to as its

Stakeholder engagement risk management performance measurement sustainability reporting

Beginning with strategy, which of the following items lists the areas of the business sustainability cycle in the correct order in which they should be performed? (Note: Not all areas are contained in each list.)

I.Research & Development II.Customer Service III Manufacturing IV.Warehousing & Distribution

In which areas of an organization's value chain can important business sustainability risks or opportunities arise?

waiting.

Lean manufacturing seeks to achieve all of the following except for

(1) the likelihood, or probability P, of an event occurring and (2) the impact, or magnitude, on the company should an event actually occur.

Most ERM programs assess, or estimate, two aspects of uncertainty for inherent risks

External failure costs

are incurred when products and services fail to conform to requirements or satisfy customer needs after being delivered to customers. Of all the costs of quality, this category can be the most devastating. For example, costs of recalls can run into the hundreds of millions of dollars.

(1) organizational strategy (2) stakeholder engagement (3) risk management (4) financial and nonfinancial performance measurement (5) sustainability reporting (6) sustainability assurance

The business sustainability cycle include

fraud, litigation support, and business valuations.

The major areas of forensic practice involve

Detective work and problem solving - The accountant must use his/her knowledge and skills to find, assemble, and present the relevant information in the best and most understandable way possible. Adversarial nature - The accounting expert must learn to work, analyze, and present information for the court in an adversarial environment. Range of potential answers - The forensic accountant must decide what is the better, more logical, and more persuasive solution to the dispute, given the information and issues. The accountant uses his/her best judgment to determine the best answer to the issues in the case. Excellent communication skills - Accountants often need to explain the financial information to laypeople because judges and juries typically know very little about accounting concepts

The nature of forensic accounting activities is both interesting and challenging. For example, some common characteristics of forensic accounting practice include

entire value chain.

Various business sustainability issues (both threats and opportunities) exist along an organization's

Warranties Other examples include lost sales because of poor product performance, returns and allowances because of poor quality, warranties, repairs, product liability, customer dissatisfaction, lost market share, and complaint adjustment.

Which of the following is an external failure cost?

The forensic accountant is trained to determine the correct answer for each case.

Which of the following is not true of forensic accounting?

Goods that enter a foreign trade zone are not subject to tariff until they leave the zone for destinations in the United States.

Which of the following is true regarding foreign trade zones?

Lean manufacturing

concerned with eliminating waste in manufacturing processes. an approach designed to eliminate waste and maximize customer value. It is characterized by delivering the right product, in the right quantity, with the right quality (zero defects), at the exact time the customer needs it, and at the lowest possible cost.

External failure costs, like internal failure costs

disappear if no defects exist.

Lean accounting

is a simplified approach to costing that supports lean manufacturing with both financial and nonfinancial measures.

Failure costs

the costs incurred because products or services do not conform to specifications. These costs tend to be most significant and, like control costs, have two major subdivisions.

Enterprise risk management (ERM)

the formal process of aligning an organization's overall desired level of risk taking with its strategy, and then managing its top risks in a manner that maintains this alignment.

Business sustainability

the practice of creating long-term organizational value through internally understanding, measuring, and managing the key threats and opportunities to achieving the organization's strategy and then externally reporting to key stakeholders on the successes and failures of such efforts.

An inherent risk

the risk that exists absent of any risk management action to reduce or avoid the risk.