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

Groupon Inc - Research Paper compositors caseIt has resulted into numerous restatements of fiscal statements. Any material weakness means internal controls were ineffective and non able to detect misstatements or irregularities.This weakness was cited by the flyering firm as the cause of its revised loot 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 material weakness because the weakness is big enough or heartrending enough to impact the overall accuracy of the audited financial statements prepared by Ernst & Young. This particular ruling is contained infra Auditing Standard No. 5 which states the exigencys 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 cre ate 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 try (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 wage 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 som e