New Audit Partner Identification Rules May Offer Opportunities and Benefits SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of New Audit Partner Identification Rules May Offer Opportunities and Benefits
From the WorldCom and Enron accounting debacles that triggered the demise of Arthur Andersen to Ernst & Young's 2013 and 2015 settlements claiming that its audits facilitated massive accounting fraud by financial services firm Lehman Brothers, large-scale financial scandals have led to increasing scrutiny of public auditors. Investors are justifiably eager to ascertain the quality of audits of public companies when making investment decisions. In the U.K., the reputation of the audit partner is recognized as a signal of audit quality, and as such, the names of the lead partner have been disclosed to the public since 2009. The U.S. standard of providing the auditing firm name without identifying the lead partner recently changed to match the U.K. and EU standard after much debate. As of May 2016, the Public Company Accounting Oversight Board has adopted-and the Securities and Exchange Commission has approved-new regulations that will require the public disclosure of the individual audit partner responsible for each public company audit, as well as the identification of any additional accounting firms that contribute to the audit. This article examines the new rules in light of disclosure requirements imposed on other professionals, as well as international auditor disclosure requirements. The accounting profession has generally opposed the new disclosures, but this article suggests opportunities and benefits for the profession as a result of the changes, including the opportunity for audit partners to develop individual reputations for quality and specialization. In addition, this article makes recommendations for business managers, owners, and investors for making the best use of the information the new disclosures will provide.
Swot Analysis of "New Audit Partner Identification Rules May Offer Opportunities and Benefits" written by Colin D. Reid, Julie Furr Youngman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Audit Accounting facing as an external strategic factors. Some of the topics covered in New Audit Partner Identification Rules May Offer Opportunities and Benefits case study are - Strategic Management Strategies, Business law, Communication, Crisis communication and Finance & Accounting.
Some of the macro environment factors that can be used to understand the New Audit Partner Identification Rules May Offer Opportunities and Benefits casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of New Audit Partner Identification Rules May Offer Opportunities and Benefits
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New Audit Partner Identification Rules May Offer Opportunities and Benefits case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Audit Accounting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Audit Accounting operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of New Audit Partner Identification Rules May Offer Opportunities and Benefits can be done for the following purposes –
1. Strategic planning using facts provided in New Audit Partner Identification Rules May Offer Opportunities and Benefits case study
2. Improving business portfolio management of Audit Accounting
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Audit Accounting
Strengths New Audit Partner Identification Rules May Offer Opportunities and Benefits | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Audit Accounting in New Audit Partner Identification Rules May Offer Opportunities and Benefits Harvard Business Review case study are -
High brand equity
– Audit Accounting has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Audit Accounting to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Audit Accounting is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Audit Accounting is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in New Audit Partner Identification Rules May Offer Opportunities and Benefits Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Audit Accounting digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Audit Accounting has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Audit Accounting in the sector have low bargaining power. New Audit Partner Identification Rules May Offer Opportunities and Benefits has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Audit Accounting to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Audit Accounting has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in New Audit Partner Identification Rules May Offer Opportunities and Benefits HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Audit Accounting
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Audit Accounting does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Finance & Accounting industry
– New Audit Partner Identification Rules May Offer Opportunities and Benefits firm has clearly differentiated products in the market place. This has enabled Audit Accounting to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Audit Accounting to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Audit Accounting has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study New Audit Partner Identification Rules May Offer Opportunities and Benefits - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Audit Accounting has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Audit Accounting has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New Audit Partner Identification Rules May Offer Opportunities and Benefits Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Audit Accounting are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Finance & Accounting field
– Audit Accounting is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Audit Accounting in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses New Audit Partner Identification Rules May Offer Opportunities and Benefits | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New Audit Partner Identification Rules May Offer Opportunities and Benefits are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Audit Accounting is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study New Audit Partner Identification Rules May Offer Opportunities and Benefits can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Audit Accounting has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Audit Accounting has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Audit Accounting needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Audit Accounting is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Audit Accounting needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Audit Accounting to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the New Audit Partner Identification Rules May Offer Opportunities and Benefits HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Audit Accounting has relatively successful track record of launching new products.
High cash cycle compare to competitors
Audit Accounting has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study New Audit Partner Identification Rules May Offer Opportunities and Benefits, is just above the industry average. Audit Accounting needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Audit Accounting has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study New Audit Partner Identification Rules May Offer Opportunities and Benefits, in the dynamic environment Audit Accounting has struggled to respond to the nimble upstart competition. Audit Accounting has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study New Audit Partner Identification Rules May Offer Opportunities and Benefits that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case New Audit Partner Identification Rules May Offer Opportunities and Benefits can leverage the sales team experience to cultivate customer relationships as Audit Accounting is planning to shift buying processes online.
Opportunities New Audit Partner Identification Rules May Offer Opportunities and Benefits | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study New Audit Partner Identification Rules May Offer Opportunities and Benefits are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Audit Accounting can use these opportunities to build new business models that can help the communities that Audit Accounting operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Manufacturing automation
– Audit Accounting can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Audit Accounting to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Audit Accounting to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Audit Accounting in the consumer business. Now Audit Accounting can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Audit Accounting can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Audit Accounting to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Audit Accounting can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Learning at scale
– Online learning technologies has now opened space for Audit Accounting to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Audit Accounting is facing challenges because of the dominance of functional experts in the organization. New Audit Partner Identification Rules May Offer Opportunities and Benefits case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Audit Accounting can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Audit Accounting can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Audit Accounting can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Audit Accounting has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Audit Accounting can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, New Audit Partner Identification Rules May Offer Opportunities and Benefits, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats New Audit Partner Identification Rules May Offer Opportunities and Benefits External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New Audit Partner Identification Rules May Offer Opportunities and Benefits are -
Regulatory challenges
– Audit Accounting needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Stagnating economy with rate increase
– Audit Accounting can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Audit Accounting
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Audit Accounting.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Audit Accounting can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study New Audit Partner Identification Rules May Offer Opportunities and Benefits .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Audit Accounting.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Audit Accounting in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Audit Accounting can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study New Audit Partner Identification Rules May Offer Opportunities and Benefits, Audit Accounting may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Audit Accounting business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Audit Accounting has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Audit Accounting needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Audit Accounting with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Audit Accounting needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of New Audit Partner Identification Rules May Offer Opportunities and Benefits Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study New Audit Partner Identification Rules May Offer Opportunities and Benefits needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study New Audit Partner Identification Rules May Offer Opportunities and Benefits is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study New Audit Partner Identification Rules May Offer Opportunities and Benefits is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of New Audit Partner Identification Rules May Offer Opportunities and Benefits is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Audit Accounting needs to make to build a sustainable competitive advantage.
