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Winstar Communications was a successful and fast growing telecommunication company in the 1990s and early 2000s. However, in the early 2000s, the company started to struggle financially. In 2000, Grant Thornton audited Winstar, issuing an unqualified opinion. After Winstar went into bankruptcy in 2002, investors started to question the quality of the audit. This teaching case is based on the Gould v. Grant Thornton case that was tried in the United States Court of Appeals in 2011/2012. It provides accounting students with an opportunity to learn about auditing procedures and the consequences when auditing procedures are not correctly followed.

Teaching case study.

This case study is suitable for introductory undergraduate auditing, advanced undergraduate auditing and master level auditing courses.

Learning outcomes are as follows: students will discover the importance of process orientation in management; students will determine the root cause of the problem by applying root cause analysis technique; students will identify the failure modes, analyze their effect, score them on a scale and prioritize the corrective action to prevent the failures; students will analyze the processes and propose error-proof system/s; and students will analyze organizational culture and ethical issues.

Purpose: This case study is intended as a class-exercise, for students to discover the importance of process-orientation in management, analyze the ethical dilemma in health care and to apply quality management techniques, such as five-why, root cause analysis, failure mode and effect analysis (FMEA) and error-proofing, in the management of the health-care and service industry. Design/methodology/approach: A voluntary reporting of a case of “radiation overdose” in a hospital’s radio therapy treatment unit, which led to an ethical dilemma. Consequently, a study was conducted to establish the causes of the incident and to develop a fail-proof system, to avoid recurrence. Findings: After careful analysis of the process-flow and the root causes, 25 potential failure modes were detected and the team had assigned a risk priority number (RPN) for each potential incident, selected the top ten RPNs and developed an error-proofing system to prevent recurrence. Subsequently, the improvement process was carried out for all the 25 potential incidents and a new control mechanism was implemented. The question of ethical dilemma remained unresolved. Research limitations/implications: Ishikawa diagram, FMEA and Poka-Yoke techniques require a multi-disciplinary team with process knowledge in identifying the possible root causes for errors, potential risks and also the possible error-proofing method/s. Besides, these techniques need frank discussions and agreement among team members on the efforts for the development of action plan, implementation and control of the new processes. Practical implications: Students can take the case data to identify root cause analysis and the RPN (RPN = possibility of detection × probability of occurrence × severity), to redesign the protocols, through systematic identification of the deficiencies of the existing protocols. Further, they can recommend quality improvement projects. Faculty can navigate the case session orientation, emphasizing quality management or ethical practices, depending on the course for which the case is selected.

MBA or PG Diploma in Management – health-care management, hospital administration, operations management, services operations, total quality management (TQM) and ethics.

Teaching Notes are available for educators only.

CSS 9: Operations and Logistics.

After completion of the case study, the students will be able to understand the calculation of cost of individual sources of funds and cost of capital, examine various tools such as economic value added and cash value added analyses which help determining whether a company has added value to its shareholders or not and explore the application of Benford’s law and the Beneish M-score in detecting manipulation of numbers in financial statements.

Nimmy Jacob, a newly recruited research analyst with an equity research firm, was entrusted with tracking the “auto ancillary industry”, specifically “Minda Corporation Ltd” (MIL). MIL was a leading diversified auto components manufacturing companies in India. The company’s share price meteorically rose during February 2021–2022 (Figure 1). The company’s turnover over the past few years had grown at a compounded annual growth rate of 15% during the three preceding years. The company had in the recent past bought a 15% stake in another competitor, Pricol Ltd, for a consideration of INR 400 crores and previously had used joint ventures and acquisitions to scale up its operations. Jacob, apart from the conventional financial analysis, had to ascertain whether all the strategic decisions were adding value to the shareholders’ investments by exploring the various tools available for the same and also calculate the minimum expected rate of return for MIL. Jacob was apprehensive about the financial statements, although the numbers for the company were good. Jacob was skeptical about a high-growth company having the incentive to manipulate its earnings. Manipulations could be in the form of abnormal increase in accruals, inconsistency in expenses and high days of receivables. Therefore, Jacobs used certain analytics/statistical tools to detect any manipulation of numbers in the financial statements of the company and to ascertain apt findings about the company.

This case study is intended for discussion in corporate finance, financial reporting and analysis and financial analytics at Master of Business Administration/undergraduate level.

Teaching notes are available for educators only.

CSS1: Accounting and finance

Why do some individuals become entrepreneurs while others do not? This fundamental question has vexed entrepreneurship scholars for some time, giving rise to various schools of thought. Traditional economic motivation theories, for example, suggest that entrepreneurial opportunities arise from changes in either supply (Shane, 2000) or demand (Dew et al., 2004) and emphasize personal economic gain as a motivator for pursuing entrepreneurship. Both neoclassical equilibrium and psychological theories take a person-centric perspective whereby stable, enduring differences among people’s characteristics, determines who becomes an entrepreneur. Opportunity recognition may be enhanced through perspective taking (i.e. putting oneself in the shoes of another person) (Prandelli et al., 2016).

The founders of the company provided us with access to the inner workings of the company, their mentors and advisors and themselves. This study used archival research and interviews when preparing this case. Interviews allow for the development of uncensored, real-life insights into the entrepreneur’s business experience. The authors first conducted a 90-min interview with Rajia and Ray at DifferenceMaker^® Central on the UMass Lowell campus. DifferenceMaker^® provided us with pictures and timelines from when Rajia and Ray participated in the various DifferenceMaker^® activities and competitions. A follow-on 90-min interview was conducted with the founders four months later at the UMass Lowell Innovation Hub to delve deeper into their transition from engineers to entrepreneurs.

In the summer of 2016, the future of invisaWear suddenly became uncertain. Rajia Abdelaziz and Ray Hamilton had conceived an idea for smart jewelry that they felt solved a real problem. But it was one thing to have a great idea and quite another to turn that idea into a real business. As engineering students, they were accustomed to solving problems, but if they truly wanted to make an impact, they had to learn to solve problems as entrepreneurs. With the help of DifferenceMaker^® and their mentors, they developed an entrepreneurial mind-set and decided to build invisaWear into a company.

This case is suitable for an undergraduate course in business or entrepreneurship. This case is intended to illustrate to both business and non-business students how individuals with different backgrounds can become entrepreneurs. Presented as a real-life example of how engineering students can make the transition to an entrepreneurial mind-set, the case can also be used to hone in on select topics including opportunity recognition, problem-solving, ideation and the business model canvas.

The case study will help to learn about the importance of pre-sanction precautionary measures before lending to self-help groups (SHGs), to learn about the potential lapses and errors while sanctioning SHG finance and to learn about the importance of bank’s guidelines and compliance before sanctioning loans.

This case study details the tenure of Seema in a rural branch of Safe Bank of India located in Haryana which she joined as a manager in the year 2016. She overachieved the target given by the district collector office, and going by the tide, she kept her reliance on the references provided by non-government organization (NGO) without complying the bank’s instructions. She committed errors while sanctioning the loans, which led towards the upsurge of non-performing assets of the branch. Later on, after investigation it was discovered that she did not follow fundamental bank’s instructions. In wake of those lapses and errors, how she could have avoided those lapses and secure the public money? What were the most important documents while granting agriculture finance and what due diligence she should have taken? How did she treat calls from the government departments? Was she right in trusting the suggestions of the NGO?

This case study caters to students of various streams, namely, management, business administration and law, and can be targeted at both undergraduate and postgraduate students. It could be suitable for several types of courses and students. Furthermore, this case study can also be targeted for various training programmes for bank employees and employees of various lending institutions engaged in agriculture finance and credit linkage programmes.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 1: Accounting and finance.