Describe at least three risks a company might face if it participates in global trade.

Each of the following scenarios is based on facts in anactual fraud. categorize each scenario as primarily indicating (1) anincentive to commit fraud, (2) an opportunity to commit fraud, or(3) a rationalization for committing fraud. also state your reasoningfor each scenario.a. there was intense pressure to keep the corporation ' stock from declining further. this pressure came from investors, analysts,and the ceo, whose financial well-being was significantly dependent on the corporation ' s stock price.b. a group of top-level management was compensated (mostly in the form of stock-options) well in excess of what would be considered normal for their positions in this industry.c. top management of the company closely guards internal financial information, to the extent that even some employees on a “need-to-know basis” are denied full access.d. managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of variability in key ratios. key ratios for the company changed very little even though the ratios for the overall industry were quite volatile during the time period.e. in an effort to reduce certain accrued expenses to meet budget targets, the cfo directs the general accounting department to reallocate a division’s expenses by a significant amount. the general accounting department refuses to acquiesce to the request, but the journal entry is made trough the corporate office. an accountant in the general accounting department is uncomfortable with the journal entries required to reallocate divisional expenses. he brings his concerns to the cfo, who assures him that everything will be fine and that the entries are necessary. the accountant considers resigning, but he does not have another job lined up and is worried about supporting his family. therefore, he never voices his concerns to either the internal or external auditors.f. accounting records were either nonexistent or in a state of such disorganization that significant effort was required to locate or compile them.

You are the manager in charge of global operations at bankglobal – a large commercial bank that operates in a number of countries around the world. you must decide whether or not to launch a new advertising campaign in the u.s. market. your accounting department has provided the accompanying statement, which summarizes the financial impact of the advertising campaign on u.s. operations. in addition, you recently received a call from a colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the u.s. advertising campaign were launched. your goal is to maximize bankglobal’s value. should you launch the new campaign? explain. pre-advertising campaign post-advertising campaign total revenues $18,610,900 $31,980,200 variable cost tv airtime 5,750,350 8,610,400 ad development labor 1,960,580 3,102,450 total variable costs 7,710,930 11,712,850 direct fixed cost depreciation – computer equipment 1,500,000 1,500,000 total direct fixed cost 1,500,000 1,500,000 indirect fixed cost managerial salaries 8,458,100 8,458,100 office supplies 2,003,500 2,003,500 total indirect fixed cost $10,461,600 $10,461,600

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?