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Unformatted text preview: Mayank Mittal FINANCIAL ACCOUNTING – Home Work 2 Question 1: Part A- The Fiscal Year end for Paychex, Inc. is 31 st may. Part B- An independent registered public accounting firm, Ernst and Young LLP, have been hired by the Audit committee for the Paychex, Inc audit. Their role is to check for the Paychex effectiveness of the Company’s internal control over its own financial reporting. Part C – Ernst & Young LLP were required to conduct an audit for Paychex in accordance with the Standards of the Public Company Accounting Oversight Board(U.S.). They were required to assess the Accounting Principles used by Paychex and the significant estimates made by its management, as well as evaluating overall financial statement presentation. The opinions stated by Ernst and Young has been satisfactory as they believe in the legitimacy of the financial accounting records for the past 3 years for Paychex, Inc. They have assessed the accounting principles that have been used by the company, and have evaluated the overall financial statement presentation. Also, in addition, the related financial statement schedule, when considered in relations to the Basic financial statements taken as a whole, has been in sync. Part D – Ernst and Young LLP has conducted an Audit based on the criteria established in ‘Internal Control – Integrated Framework’ and have explicitly mentioned that there has been an unqualified opinion regarding the company’s internal control over the its regulation of Financial Statements. Thus there have been no sorts of exceptions mentioned by them. Question 2 Part A – Paychex, Inc are a leading provider of payroll, human resource, and benefits outsourcing solutions to small and medium sized businesses in the U.S. They also have a subsidiary in Germany, even though it generates less than 1percent of its total revenue. The Service Revenue mainly comprises of Payroll and Human Resource portfolios of the services and products they provide. Payroll service revenue serves as the Backbone for Paychex. The service revenue generated from Payroll, $1.4 Billion mainly included payroll processing, payroll tax administration services, employee payment services and other ancillary service. They have a strong outlook for the revenue generated from Payroll services, and and implemented new technologies like implementation of ‘MMS’, which have shown growth in their software as a solution. Due to the economy crash, the company has suffered some losses as compared from 2009. Its total revenue decreased by 4%, and service revenue decreased by 3%. It also included a 3.2% decrease in their client base. However, the client retention has been better for them this year, The Human Resource Services revenue increased by 3% to $540 Million. ‘Recovery in the financial markets and increased levels of larger plans converting to Paychex has driven the 33% increase in the asset value of retirement services client employees’ funds....
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This note was uploaded on 11/07/2010 for the course MISM 95712 taught by Professor David during the Spring '10 term at Carnegie Mellon.
- Spring '10