Internship Report Harvard Case Solution & Analysis

Background

This report describes the internship period I spent in Deloitte Luxembourg. I got the internship opportunity as it was offered by the University for students in Masters and Audit for 4th semester. The internship was carried out in 2014. Due to the subject, the internship was focused on audit elements such as risk assessment procedures, materiality, consolidation and different ISAs in the audit.

This internship report contains my activities that have allowed me to achieve my objectives related to this audit. The description of the organization has been provided and the activities it is involved in(Deloitte, n.d.).

Description of the Organization

Deloitte” is an audit firm where thousands of dedicated professionals do their work in independent firms throughout the world in order to provide audit, consulting, financial, risk management, tax, and related services tomany clients(Deloitte, n.d.).

These firms are members of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). Each DTTL member firm provides services in particular geographic areas and is obliged to followthe rules and professional regulations of the particular country or countries in which it operates(Deloitte, n.d.).

Each DTTL member firm is developed in accordance with national laws, regulations, customary practice, and other factors, and may secure the provision of professional services in its territory through subsidiaries, affiliates, and other related entities(Deloitte, n.d.).

            Every DTTL member firm does not provide all the services. Each DTTL member firm is legally separate and independent entities, which cannot obligate each other. DTTL and each DTTL member firm are liable only for their own acts(Deloitte, n.d.).

With over 1600 employees, Deloitte is one of Luxembourg's largest, strongest and oldest professional services firms. It has very talented teams that serve clients in various industries, and they are proud of their ability to provide quality services in audit, accountancy, tax, financial advisory & consulting.The company where I did my audit internship, auditors have several years’ experience in a big firm and they are very competent in audit sector. This audit firm is an approved audit firm. Its clients are focusing more on real estate, holding companies, commercial, consolidation accounting and industry sector(Deloitte, n.d.).

Consolidation Accounting

Many bay windows are composed of numerous separate companies and in turn, prepare consolidated financial statements.Consolidated financial statements show the fiscal situation and results of operations for a parent (controlling entity) and one or more subsidiaries (controlled entities) as if the individual entities in reality were a single company or entity (The Reportng Entity and Consolidated Financial Statements, n.d.).

Integration is needed when a corporation possesses a majority of another corporation’s outstanding common stock.The accounting rules employed in the provision of the consolidated financial statements are the same accounting rules used in preparing separate-company financial statements (The Reportng Entity and Consolidated Financial Statements, n.d.).

Two companies are believed to be related companies when one holds the other one. Consolidated financial statements are mostly thought to be more useful than the separate financial statements of the individual companies when the societies are linked.Whether the subsidiary is acquired or created, each individual company maintains its own accounting records, but consolidated financial statements are required to represent the companies together as a single economic entity for general-purpose financial reporting (The Reportng Entity and Consolidated Financial Statements, n.d.).

Benefits of Consolidation

Consolidated financial statements are presented primarily for the benefit of the shareholders, creditors, and other resource providers of the parent. Consolidated financial statements are introduced in the first place for the benefits of the shareholders, creditors, and other resource providers of the parent society (The Reportng Entity and Consolidated Financial Statements, n.d.).Internship Report Case Solution

Limitations of Consolidation

While consolidated financial statements are useful, their limitations also must be kept in mind. Some data is lost, as anytime data sets are aggregated; this is particularly true when the information involves an aggregation across companies that receive substantially different operating characteristics (The Reportng Entity and Consolidated Financial Statements, n.d.).

Subsidiary Financial Statements

As subsidiaries are legally separate from their parents, the creditors and stockholders of a subsidiary generally have no claim on the parent, nor serve the stockholders of the subsidiary share in the earnings of the parent.Therefore, consolidated financial statements normally are of slight use to those interested in receiving information about the assets, capital, or income of individual subsidiaries (The Reportng Entity and Consolidated Financial Statements, n.d.)............

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