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Pier 1 Case

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1A Pier 1 imports is a typical chain retailer that operates distinct home furnishings and decoration based on customers’ preferences and fashion tendency with a competitive price. It was founded in San Mateo, California in 1962, then established its corporate headquarters in Fort Worth, Texas in 1966. After more than forty years of rapid development, it operates more than 1000 stores in the United States, Canada, El Salvador, and Mexico now. (1) Pier 1 imports also operates six large distribution and fulfillment centers to transport merchandise to the various stores or to deliver directly to customers.(10-K, p5) The table below lists Pier 1 imports’ main locations.(10-K, p4)
1B Pier1 imports sells home goods, the merchandise are many and …show more content…

On one hand, the market price went down, on the other hand, under the common stock share repurchase programs, Pier1 imports repurchased 10,280,312; 9,788,257; 5,822,142 and 9,498,650 shares in fiscal 2015, 2014, 2013 and 2012 respectively, so the outstanding shares were decreased faster. (10-K, p19)
1D Ernst and Young LLP (EY) conducted the financial audit of Pier 1 Imports and issued a standard unqualified audit report. A standard unqualified audit report means the financial statements are free of material misstatement and fairly stated, the auditor provided reasonable assurance on the financial statements so that the users can rely on them to make any investment decisions.
1E Ernst and Young LLP (EY) also issued an unqualified opinion on the company’s ICFR, it implied Pier 1 imports’ internal control was designed and operated effectively in all material …show more content…

They have significant differences. First, the auditor provides reasonable assurance about whether the financial statements are free from material misstatement due to error or fraud in an audit report, but provides limited assurance about whether the financial statements are free from material modifications in a review report. A few procedures are performed in a review engagement. (3) Second, a review report is conducted according to the standards of AICPA, while an audit report is conducted according to the standards of PCAOB. Moreover, review service is less cost than audit

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