Intensive Study Programme case studies

We are developing a case study that focuses on the complexity of the accounting regulation of financial instruments under IFRS. We look at a company that is operating on international scale in the eco-fashion industry. We will look at two aspects of IFRS 9.

The company acquires financing and does various investments. In the first case study we examine the characteristics of these not-so-plain-vanilla instruments. The case will walk participants trough the important decisions and judgements and the participants will make decisions on classification and measurement.

In the second case study the focus will be on the expected credit loss model. Using statistical skills, participants will be required to carry out calculations in given scenarios estimated how much is the expected credit loss and how will it effect the earnings and the net assets.

The case is being designed to cover a multitude of issues which, taken in its entirety,  would necessitate a full semester’s engagement.  The elements that will be considered in DIPCAT’s Intensive Study Programmes are narrowly focused and foundational but given the complexity of the issue, even the fundamental questions will require broad knowledge from the participants. 

This case study highlights national and international tax issues of a MNE operating throughout Europe.  The case features a leading manufacturer and retailer in eco-fashion.  The fictitious Group has developed a technique by which their clothing is manufactured through 3D printing.  The medium-term strategy of the Group is for their sales to be made directly in the homes of their customers through software download. 

We suspect this fantasy Group is not far from reality. The Financial Transaction Tax proposed by the EU and emerging in national legislation is aimed at current and very real digital giants (i.e. Amazon, Google, Netflix, YouTube). The Common Consolidated Corporation Tax Base is another EU proposal responding to the relative ease of shifting profits to lower tax jurisdictions.

This case will give students an appreciation for the complexities MNEs, tax advisers and tax authorities face in the current international tax environment. We will consider national and supra-national frameworks that impact the European Group. 

The case is being designed to cover a multitude of issues which, taken in its entirety,  would necessitate a full semester’s engagement.  The elements that will be considered in DIPCAT’s Intensive Study Programmes are narrowly focused and foundational.  Students will enjoy three specific, team-oriented tasks. The finale will be a courtroom role-play between the Group’s Tax Advisers and two nations’ Tax Authorities!

This case study is linked to the case covered by other parts of the DIPCAT project. It highlights CSR and tax issues of a MNE operating in the textile industry throughout Europe. The Group is very committed to CSR and has a specific CSR department. The Group is introducing a new tax policy aimed at reducing the tax pressure. In fact it is planning to create a new corporate and to move part of the production process in two low-tax countries. Moreover the Group has decided to move the Group financing company in a country characterised by opacity on tax information.

Such proposals affect the Group’s CSR strategy. Thus students will be asked to identify themselves with different categories of stakeholders, and assess the tax decisions described in the case study in order to answer the following questions:

• How company’s stakeholders will perceive the Group’s new tax policy?
• What would be the effect of putting into practice the tax proposals on the principles applied for the sustainability reports?

The case is intended to offer students the opportunity to form their own idea about:

1. the relationship between tax behaviour and socially responsible behaviour;
2. difficulty in drawing a clear line between correct and incorrect tax behaviour;
3. consistency between aggressive tax behaviours and CSR.

This case study builds on previous case study parts. It assumes that the leading manufacturer and retailer in eco-fashion (SDG) plans to acquire another fashion company.

Because of recent fraud cases in the industry SDG wants not only to perform a normal due diligence but also insists on an audit of the target company. The management and owners did accept this. DIPCAT auditors were engaged to do the audit.

Today in most companies all real-life transactions are mirrored in digital form. Benefits of digitalised data should be exploited as much as possible to ensure a reliable and efficient audit. The issues covered include planning the audit by understanding the company and its industry, traditional file formats an the new “European Single Electronic Format – ESEF”, materiality in audit planning, journal entry testing, process mining, sentiment analysis in financial reports, text mining in documents (contracts), fraud risks for auditing and identification of red flags.

As hands-on teaching of ICT skills can only be achieved if students have access to both hardware and software. Students’ laptops are used in the course (“Bring your own device!”). The software will be normal office programs that are common or specifically distributed software packages that students can install on their laptops without costs.