Internal control is designed and implemented by an entity's management to provide assurance regarding the achievement of objectives related to the effectiveness and efficiency of operations, the reliability and timeliness of financial reporting, the prevention and detection of fraud and error, and compliance with applicable laws and regulations. Additionally, internal control plays a vital role in how management meets its stewardship or agency responsibilities. An entity's internal control extends beyond matters that relate directly to the functions of the accounting system. It consists of the following five components: the control environment, the entity's risk assessment process, the information system, and related business processes. 2015). It is crucial for Legoland to understand what would attract guests. Oftentimes, having detailed consumer information is critical in meeting their demands. Hence, detailed planning is essential. In this case, Legoland could employ effective management control activities such as capital investment budgeting. By analyzing the costs involved in the necessary investments in innovative rides and comparing the alternatives through a cost-versus-benefit analysis, management could choose the best investment that would likely result in repeated visits by the patrons as the rides are unique. Likewise, by analyzing customers' demand, Legoland can consider shutting down rides and attractions that are the least popular with their consumers. Furthermore, to combat seasonal demand, Legoland's management should employ marketing strategies to actively manipulate customer demand. For instance, they could charge different prices during peak and non-peak periods to entice more visitors during the latter period. They could also offer special rates for early bookings, group bookings, and annual passes. Additionally, management can use accounting information software to predict and plan the rides, facilities, capacities, and future demand. This ensures that no matter the season or the number of guests in the park, visitors' experiences would always be favorable (Romney & Steinbart, 2012; Raluca & Gina, 2015).
Implementing strategies to create an effective internal control environment is needed to prevent and detect controls of fraud (Murphy, 2015). Control is needed to combat fraud, enforcing employees and volunteers to do the right thing. Management must have control of the organizations operations to tackle risks when they arise (Arshad et al, 2015). According to Arshad et al (2015):
Internal controls are in place to protect entities against theft from dishonest workers and outside predators. They are also an accurate series of checks and balances and are in place to find discrepancies.
With all of the designing that was happening in the company, it helped to shrink its profits. Lego City was a popular toy for children but the redesigning shrank the sales and attention the product was once getting. A worker of Lego said it well when he said, “Management was to blame, the same people who were doing crappy products then are making world-class products today” (Greene). Essentially the managers and higher up executives didn’t communication what direction the company should be going. They didn’t have a strategy to follow and tell their employees. With no clear strategy and communication in place, things were a free for all. This lead to the declining profits and stability of the company. Lego assumed that if the designers were able to create whatever they saw fit, that somehow it would lead to a breakthrough in the toy maker’s product line. However, this ideology backfired with high production costs and low profit margins.
Yet, although there was a notable increase in sales in 2012, the company income statement for 2012 also showed a rise in the company’s expenses. Total expenses rose from 13,065DKK in 2011 to 15,489DKK, suggesting both promotion and production of the new line incurred higher expenses for LEGO. The increase was of 18.6%, and although relevant, comparatively smaller than that of revenue. It can be presumed that the firm has benefitted from economies of scale. Introducing new product lines in the same company benefits from its already established operations. In this case is due to a variety of reasons: because of the law of variable proportion where fixed costs are spread over a larger quantity of units, or as a result of having an established reliable supplier and benefitting from discounts by buying in
Disney Consumer Products (DCP) is one of the business segments of The Walt Disney Company. DCP was designed to bring new, exciting and intriguing product experiences across many categories –everything from toys and apparel to books and fine art. DCP as a whole is the worlds largest licensor and thinks of its self as liable for bringing the magic of all things Disney into the consumers homes with products they can enjoy anytime of the year. Revenue for Disney Consumer Products for the year of 2014 was at 3.93 million USD.
According to PCAOB Auditing Standard 5 paragraph 2, “effective internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. If one or more material weaknesses exist, the company 's internal control over financial reporting cannot be considered
What is internal control? According to University of Phoenix, Axia College Internal Control and Cash (2009), internal control is all of the related methods and measures adopted within an organization to safeguard its assets and enhance the accuracy and reliability of its accounting records. The primary reasons for internal control are help companies protect their investments and merchandise against theft from everyone, including employees and to make sure that the accounting is done correctly and truthfully.
The company LEGO has been around since 1949 (Wiki), and has created a dominate market for plastic blocks used by kids of all ages, but has been losing interest in children since then. So LEGO and 360PR had an idea to reestablish themselves as a brand with the youth by encouraging parents to force them on their kids. The campaign was called Builders of tomorrow. After doing research among parents, and how they get info about parenting tips, LEGO implemented their dialogue to parents through a website. The website featured stories about builders of tomorrow, using accomplished famous people telling their childhood stories involving LEGOs in their childhood. The website featured
LEGO won litigation in China that in term of the infringing patent of its brick toy product. The Beijing High People 's Court ruled in favor of LEGO in a court battle which began in 1999. LEGO said it was "the first time that the Chinese legal system has delivered a judgment that confirms copyright protection of industrial design/applied art". This case was related China toy manufacturers which are called Coko based in Chinese city of Tianjin, LEGO also requested Coko to announce official apology in bigger scale newspaper office Beijing Daily and they were asked to pay the penalty for LEGO.
If your looking for two warm and fun vacation spots LegoLand Carlsbad California and LegoLand Winter Haven Florida are two very good places to go. Check out all the details each one has to offer and make the best decision for your family.
The LEGO Group took multiple key areas into consideration when making the decision to outsource their product. First, LEGO took into consideration that they urgently needed to make transformations in all major areas of the supply chain, before they could decide whether or not to outsource. The company came to the conclusion that they needed to simplify the LEGO sets. A LEGO senior director even noted that, “This excessive complexity of shapes and colors of LEGO elements that was coming from the development was badly hitting the supply chain.” The over complexity of their product had caused a significantly high raise in costs, so before they could decide on outsourcing the product they needed to lower cost and simply product design. By doing so, the company would be prepared for new scenarios of the newly outsourced production set up.
This is a publicly traded company in the US that has been ding quite well in the recent years. The company’s 10k filing for the year 2014. From this statement, the risks facing the company will be identified classified and suggestions made on how best to mitigate them in the subsequent areas. There are various areas that the risks can arise based on the company’s 10k filling (Mertz, 1999).
The non-commercial website Lego.com has been an enormous success providing Lego with a strong presence on the Internet. However, implementing a website capable of handling sales transactions requires a great deal more than a non-commercial site. The firm has implemented an ERP system which may provide some technical support for the website. The details of the ERP system are unknown at this time; however, the goal of implementing the system was to optimize the supply chain from production to distribution, which will be a significant opportunity for the E-Commerce project. Another important consideration is incorporating the ERP system into the E-Commerce transactions so that separate systems and processes are not necessary.
In stead of choosing Petronas Twin Tower, Kinabalu Park or Melaka, tourists nowadays have a new and wonderful destination when coming to Malaysia that is **Legoland Malaysia Resort**. It covers an area of 30 hectares in the sea town nothern of Johor Bahru. Along with five other Legolands that were built in Denmark, Britain, German and America, Malaysia Legoland is the first Legoland in Asia and also the first International Park in Malaysia. To build this great complex, more than 50 lego bricks have been used by decorative staffs. From December 2012, Legoland is officially opened and it attracts more than two million of visitors every year from not only around Asia but also the whole world.
It is not detected, prevented or modified on a timely basis by client’s internal control system. It will occur in account balance, disclosure or class of transactions. This risk is a function of the effectiveness of the design and operation of an entity’s internal control. The control risk may not be zero, it may be minimal. Some control risk may always exist, it is due to the inherent limitations of internal control.