The primary issues facing Zoom and its auditors stem from the Gages' aggressive growth strategy and their approach to risk management in many of Zoom's key risk exposures. While the company has enjoyed incredible growth and is considered to be “leading edge” and innovative (an important success factor in the industry), it is struggling to maintain adequate cash flow. This cash flow crunch can be partially attributed to the state of the industry, but it is also a result of the Gages' management of controllable risks. For instance, in the case of Zoom's product portfolio, although the Gages' move into apparel has helped to spread risk, the Gages did not attempt to seek other related products for other seasons—such as surfing or skateboarding. Further, Zoom now has large risks related to increasing costs of offshore manufacturing in China, and it appears that Zoom is unable to find any viable alternatives...
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1 November 2012
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November 01 2012
Zoom Snowboards Incorporated: Understanding the Impact of Management Decisions on the Audit Plan
Joanne C. Jones
Joanne C. Jones
Joanne C. Jones is a Professor at York University.
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I thank Amalia Spensieri, Sandra Iacobelli, and Larry Yarmolinsky for their helpful comments on various versions of this paper, as well as anonymous reviewers, the discussant, and participants in the 2010 AAA Auditing Section Midyear Meeting. I also thank Elizabeth Clow for her research assistance and the professors who used this case in their classroom.
2012
Issues in Accounting Education Teaching Notes (2012) 27 (4): 50–83.
Citation
Joanne C. Jones; Zoom Snowboards Incorporated: Understanding the Impact of Management Decisions on the Audit Plan. Issues in Accounting Education Teaching Notes 1 November 2012; 27 (4): 50–83. https://doi.org/10.5555/iace-50206TN
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