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UK PROFESSORS STUDY NEW RESTAURANT-AUDITING METHOD

By Cara Meade

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The case study will help students understand strategic advantages and risks associated with new product development, strict cost structure control, price limits, unit-level management and labor, and other business operations that drive results reported in financial statements..

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July 6, 1999 – (Lexington, Ky.) – Three University of Kentucky Gatton College of Business and Economics professors are developing educational materials intended to give students rich, discovery learning experiences with a new strategic-systems approach to auditing restaurants.

Management Professor Terry Amburgey, marketing Associate Professor Robert F. Dahlstrom and accounting Associate Professor Robert Ramsay have been awarded a $40,000 grant under the KPMG/University of Illinois Business Measurement Case Development and Research Program. Also involved in the project is Ball State University accounting Assistant Professor James Duncan, who received his Ph.D. at UK. The grant funds will be used to defray the costs of preparing a case study on the use of KPMG’s Business Measurement Process, or BMP, for the audit of Tricon Global Restaurants Inc. of Louisville.

Tricon, parent company of KFC, Pizza Hut and Taco Bell restaurant chains, was founded in 1997 as a spin-off from PepsiCo. Tricon is the world’s largest (by number of units) quick service restaurant company with almost 30,000 units operating in over 100 countries.

KPMG’s new auditing approach guides the auditor’s acquisition of knowledge about the client’s business environment, its strategies, and its business processes when developing expectations about financial statement assertions. The case study will help students understand strategic advantages and risks associated with new product development, strict cost structure control, price limits, unit-level management and labor, and other business operations that drive results reported in financial statements.

The professors plan to incorporate the case study into their fall semester classes. Subsequently, the case study will be available for use by faculty members around the world free-of-charge via the Case Development and Research Program website (http://www.cba.uiuc.edu/kpmg-uiuc/).


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