Company: Harvey Norman
Part 3 – Understand objectives, strategies and Assessing Business
·Industry developments (a potential related business risk might be, for example, that the entity does not have the personnel or expertise to deal with the changes in the industry).
·New products and services (a potential related business risk might be, for example, that there is increased product liability).
·Expansion of the business (a potential related business risk might be, for example, that the demand has not been accurately estimated).
·New accounting requirements (a potential related business risk might be, for example, incomplete or improper implementation, or increased costs).
·Regulatory requirements (a potential related business risk might be, for example, that there is increased legal exposure).
·Current and prospective financing requirements (a potential related business risk might be, for example, the loss of financing due to the entity’s inability to meet requirements).
·Use of IT (a potential related business risk might be, for example, that systems and processes are incompatible).
·The effects of implementing a strategy, particularly any effects that will lead to new accounting requirements (a potential related business risk might be, for example, incomplete or improper implementation).
Part 4– Performing Analytical Procedures to understand Entity’s Performance
You are also required to perform analytical procedures (ratio analysis) on the selected company for 3 years and compare those ratios across time, and to industry data or a major competitor.
These ratios are readily available and can be access through Data Analysis premium /Morningstar Data Analysis. Data Analysis Premium is a premier research tool, providing comprehensive data on all companies listed on ASX,