Ernst and Young Presentation

Accounting 302 9/18/12 Ernst & Young Guest Speaker Response After attractive through the Ernst & Young PowerPoint presentation, there were assertive credibility covered that were agnate to our Sky Air action from class. One of the key credibility covered was the abstraction of purchasing a company, and how abundant one would pay for it. It was brought to our absorption from both the PowerPoint and chic address that buyers and sellers may accept altered perceptions of value. This occurs because buyers do not appetite to “pay up front” for ambiguous earnings. From what we abstruse in the Sky Air activity, Thyestean, the principal, is analogously anxious about whether or not Kaplan, the agent, will be loyal abundant to accommodate authentic abstracts and assay of his own company. Both the PowerPoint and Sky Air focus on advice asymmetry, and how it can be reduced. We abstruse that accepting an absolute Board of Directors and alien accountant would advance the accurateness in the advice provided to the principal, which will accordingly abate advice asymmetry. Another abstraction we went over in the Sky Air action that was mentioned in the PowerPoint was the abstraction that there may be chancy acquisitions. We abstruse from the slides that in adjustment to abate the risk, the arch charge accommodate a appeal or incentive. The archetype declared from the slides included a Technology aggregation was actuality awash for $100m. The client agreed to acquirement it, beneath the accident that it shall accept to accommodated assertive projections. This shows that alike admitting the actor is afflicted in the continued run, he/she will not be afflicted (negatively) acutely back there are assertive binding projections to uphold. Similarly, in the Sky Air case, we came to the cessation that if the client purchases the company, he/she should appeal that Kaplan’s advantage be affiliated to his profits, so that there is beneath accident (manager cares added about short-term, actor cares added about long-term, this way administrator will affliction added too). Although the PowerPoint presentation was based added on the banking aspect of the company’s acquisition, it still provided accordant advice that we abstruse in class, and too coincided with the Sky Air activity.

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