DellComputerCorporation2006

DellComputerCorporation2006 - Dell Computer Corporation1...

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Dell Computer Corporation 1 Planning Materiality and Tolerable Misstatement Objectives Determine planning materiality for an audit client Allocate planning materiality to financial statement elements Provide support for your materiality decisions Dell Computer Corporation designs, develops, manufactures, markets, services, and supports a wide range of computer systems, including desktops, notebooks, work- stations, and network servers. The company also markets software, computer peripherals, and post-sale service and support programs. The company's products are sold in more than 170 countries and it has manufacturing facilities in Round Rock, Texas; Limerick, Ireland; and Penang, Malaysia. Net revenue for fiscal 1998 was $12.3 billion and net income was $944 million. Dell generally experiences stronger revenues in the second and third fiscal-year quarters. The company's business strategy is to deliver the best customer experience through direct, comprehensive customer relationships, cooperative research and development with technology partners, custom-built computer systems, and service and support programs tailored to customer needs. The direct customer approach eliminates the need to support an extensive network of wholesale and retail dealers. This direct customer focus allows the company to reduce the cost of its products by avoiding typical dealer markups and avoiding higher inventory costs associated with the wholesale/ retail channel. In addition, direct customer contact allows the Company to maintain, monitor, and update a database of information about customers and their current and future product and service needs, which can be used to shape future product and service programs. The company's partnerships with leading-edge technology companies create efficient procurement, manufacturing, and distribution processes that allow Dell to bring relevant technology to its customers faster and more competitively priced than many of its competitors. Dell common stock is traded on the NASDAQ national market, and Dell is required to have an annual audit pursuant with the 1934 Securities and Exchange Act. As of the close of business on September 8, 1998, Dell had 1,273,510,968 shares of common stock outstanding with a trading price of $59 11/16. 1 This case was prepared by Frank A. Buckless, Ph.D. and Mark S. Beasley, Ph.D. of North Carolina State University and Steven M. Glover, Ph.D. and Douglas F. Prawitt, Ph.D. of Brigham Young University, and modified by J. Christopher Westland PhD CPA. The background information about Dell Computer Corporation was taken from Dell Computer Corporation's February 1, 1998, Form 10-K and August 2, 1998, Form 10-Q filed with the Securities and Exchange Commission. The case is intended as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of an administrative situation.
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BACKGROUND INFORMATION ABOUT THE AUDIT Your firm, Smith and Jones, PA., is in the initial planning phase for the fiscal 1999 audit
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This note was uploaded on 01/23/2012 for the course BUSI 4900 taught by Professor B.c. during the Fall '11 term at Carleton CA.

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DellComputerCorporation2006 - Dell Computer Corporation1...

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