Peet's Coffee Case Study

Great Essays
Assignment 2: Audit Planning and Control
Peet’s Coffee
It has been requested that we audit for Peet’s Coffee and we have accepted this audit engagement. We will outline in this document the necessary steps to plan the audit we are going to perform for Peet’s Coffee.
First, we must get an understanding of the client’s business. Peet’s Coffee is a publically traded company that was founded in 1966. The first Peet’s Coffee shop was located in Berkley, California and was ran by the owner and founder, Alfred Peet. Peet’s Coffee roasts and sells specialty coffee and various bakery and coffee shop items. Peet’s coffee can be found in retail and specialty stores and their coffee is also available to be delivered to homes, offices, restaurants, and
…show more content…
In recent years this amount has changed but has not changed much. The earnings per share for the two previous years were $1.48 and $1.34. This shows that the earnings remain consistent. When compared to Starbucks Coffee’s earning per share of $1.83, they are very close in amount. They both offer the same types of coffee services. Green Mountain Roasters has a much higher earing per share of $2.28. Green Mountain Roasters recently acquired Keurig which gives them an advantage in the single serve coffee brewing market. According to the article Single-serve Coffee Revolution Brews Industry Change by Angel Gonzalez, the single serve coffee use has grown rapidly since it’s introduction in 1998 and now makes up a significant percent of coffee consumption (2012). Peet’s Coffee must to continue to expand into the single-serve market to appeal to a new coffee …show more content…
The Audit Risk Model serves as a methodology to identify an audit strategy that needs to be followed. Audit risk is the risk that an auditor may issue an unqualified report due to the auditor’s failure to detect material misstatement or fraud. Peet’s Coffee has an extensive system of internal control. They have internal control procedures that address the five control activities. They involve separation of duties, proper authorization, adequate documents and records, physical control over assets and records, and independent checks on performance. For this reason, the inherent risk for Peet’s Coffee is low and control risk is low which make the overall risk of misstatement lower. This results in a high detection risk meaning there is a higher chance that the auditor will not find material misstatements when they are actually

Related Documents

  • Great Essays

    Although starbucks didn’t have the first mover advantage,it got an opportunity to give something new to the region. One of its competitors Double Coffee had the first mover advantage. But huge differences are there…

    • 1975 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    If one needs a coffee to kick start their day, the options for where to get their fix are almost limitless. But even with the rise of local coffee shops or other fast food chains, there is a high chance for one to grab their brew at Starbucks or Dunkin ' Donuts. They are both worldwide coffeehouse chains that are still continuing to grow. Although they may seem like just an average joe store, they both have pros and cons in each cup. The largest dispute is whether or not these coffee consumers are getting their daily grind at Dunkin ' Donuts or at Starbucks.…

    • 729 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    The coffee craze is the United States is growing rapidly and getting out of hand. Many people are paying for overpriced beverages made with suspicious ingredients. In Dave Barry’s newspaper column, “Decaf Poopacino”, he explains that “the specialty coffee craze has gone too far.” He supports his claim by using an anecdote from his own life along with informal comedic diction to relate to the reader and make is point more clear. His humorous tone allows him to entertain the reader and it allows him to make his irritating experience seem like a comedic and relatable story.…

    • 474 Words
    • 2 Pages
    Improved Essays
  • Great Essays

    First, during an audit, an auditor should ensure that they obtain the appropriate assurance to tackle the audit risk. Many people assume that the information gathered from the third party is more reliable than the evidence collected by the audited company. However, in the case study, the company had already colluded with its suppliers to provide false information to the audit team, and this jeopardized the review process. Therefore, it is advisable for an auditor to ensure that they maintain a professional skepticism by considering previous audit reports and the relationship between the audit client and the third party. Consequently, over-reliance on a third party during an auditing process, although proven to be efficient since it is free from adjustment or influence by the client audit.…

    • 1475 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    While Great Cups of Coffee’s acquisitions have built a stronger organization and potential long term success, creating a unified corporate culture is an important factor in the overall success of the company. The current problems that Great Cups of Coffee are facing can be contributed to lack of planning when they acquired two new companies. By implementing a plan to change their corporate culture, they will be able to build a a strategic plan, focus on the development of their employees, and create a unified brand identity. Through this, GC3 will create a more productive company that aims to achieve successful…

    • 1152 Words
    • 5 Pages
    Improved Essays
  • Decent Essays

    Mkt 421 Week 4 Starbucks

    • 656 Words
    • 3 Pages

    Running head: STARBUCKS 1 STARBUCKS 4 Starbucks Hieu Le Columbia Southern University Starbucks Starbucks is the largest coffee chain in the world, which serves various coffee brands, pastries, and other foods for consumers in the United States, and in the world. The firm headquarter resides at Seattle, WA.…

    • 656 Words
    • 3 Pages
    Decent Essays
  • Superior Essays

    Mrs. Wardlaw, I am reaching out to you today to discuss the possibility of fraud within the Apollo Shoes financial statements. After reading through some company documents in preparation of this Audit I have noticed multiple red flags that although in themselves do not constitute fraud outright, they do demand that we investigate this issues further to ensure fraud is not taking place. Through my initial research I believe the possibility of fraud at Apollo Shoes to be very high, and as such we must take precautionary measures to avoid risk falling back on the firm. In my next paragraphs I will outline some of the questionable practices I have noticed from the board of directors meeting minutes, and my analytical review, and why these factors…

    • 1781 Words
    • 8 Pages
    Superior Essays
  • Decent Essays

    Many other companies have attempted to obtain the amount of success as their competitor, Starbucks, but no one can seem to beat the popular and well liked coffee shop. Starbucks has a unique…

    • 903 Words
    • 4 Pages
    Decent Essays
  • Great Essays

    The Future of Tim’s Coffee Shoppe AB299: Associates Capstone in Management January 20, 2015 Denise A. Brown Executive Summary Tim’s Coffee Shoppe has the ability to become as successful as he wishes. With the recommendations on the following pages, Tim can do just that. With improvements across the board from technology to repairs, Tim will increase his sales and profits. Along with his staff their supporting him and vice versa, he will only continue to grow in the right direction. Regulations and Management…

    • 1878 Words
    • 8 Pages
    Great Essays
  • Great Essays

    Peregrine Fraud Case Study

    • 1216 Words
    • 5 Pages

    1) At Peregrine, the risk factors, especially those aligned with control environment factors and the “tone at the top” are discussed. The risks included having a paper based confirmation system for the entire business; no segregation of duties, which meant that only one or very few people were working on the financial statements, and in this case Mr. Wasendorf was the only one and had altered all bank documents using only Photoshop, excel, scanners, and printers. Continuing on, time off was not required at Peregrine, which could have ultimately discovered this fraud much earlier, by allowing someone else to sit in the absentee’s seat and review all of their work. Additionally, Peregrine lacked internal auditors or an audit committee at the time. The presence of the internal auditors could have decreased odds of misstatement incentives to commit fraud by management, called fraudulent financial reporting, and overseen…

    • 1216 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    Management of Stakeholders at Starbucks Introduction Irrespective of the size, every organization has its stakeholders. Stakeholders in this context refer to any person, or organization, that has some vested interests in the organization. These interests may be direct or derived. In this regard, Starbucks, which is the world’s most renowned coffee Store, has stakeholders.…

    • 1096 Words
    • 5 Pages
    Improved Essays
  • Great Essays

    4.4.0 Target Market 4.4.1 Adults (Aged 25-44) Starbucks targets this group as a majority of them have a high income and professional careers. Starbucks makes it a point to provide this group with a unique and relaxing experience so they will treat Starbucks as their third home, after their home and workplace. This will then encourage them to relax and spend their time at Starbucks when they are not busy at work, or resting at home. 4.4.2 Young Adults (Aged 18-24)…

    • 1147 Words
    • 5 Pages
    Great Essays
  • Superior Essays

    Starbucks

    • 1587 Words
    • 6 Pages

    SWOT Analysis Strengths (1) Starbucks is one of the several highly profitable organizations. So basically it has a very sound financial records. (2) It is a global coffee brand with 22,000 retail stores in 67 countries. This makes it the largest coffee chain in the world. (3) Starbucks belongs to the fortune 500 list and it is famous for valuing their human assets.…

    • 1587 Words
    • 6 Pages
    Superior Essays
  • Great Essays

    Starbucks Mission Analysis

    • 1099 Words
    • 5 Pages

    Starbucks has one simple mission, which is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” It is this mission statement which has contributed to the development of the brand over the past four decades, as it is found in Starbucks more than just a coffee shop. It is not just an “escape” for anyone who needs a break from their day-to-day work but also becomes a place for friends to hang out and even a venue for businessman to meet. We want to provide people - regardless of their age, occupation, or location - a unique experience: a coffee shop as a place to relax, work and make friends.…

    • 1099 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    4.0 Porter’s Five Forces The Porter’s five forces of the observer determine the competitiveness of competitors, the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers and the threat of alternative products and services. 4.1 Rivalry Among The Competitors (high to moderate) The use of concentrated coffee does not depend on the cost of the item, but the difference between each item and respect includes variables such as the brand estimate of the item, the market situation of the organization, and the nature of the customer's interest. a) The highly competitive business model…

    • 789 Words
    • 4 Pages
    Improved Essays

Related Topics