CFo PRoJECT- BARNES AND NoBLE

CFo Project- Barnes and Noble

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CFo Project- Barnes and Noble

Introduction

Barnes & Noble, Inc. operates as a content, commerce, and technology company in the United States. It provides access to books, magazines, newspapers, and other content through its multi-channel distribution platform. It sells trade books, including hardcover and paperback consumer titles; mass market paperbacks, such as mystery, romance, science fiction, and other popular fiction; children's books; eBooks and other digital content; NooK products comprising NooK 1st Edition, NooK Wi-Fi 1st Edition, NooK Color, and The All-New NooK eBook Reader devices and related accessories; bargain books; magazines; gifts; cafe products and services; educational toys and games; music; and movies. The company sells its products directly to customers through its bookstores and on Barnes & Noble.com. It also sells textbooks and course-related materials, emblematic apparel and gifts, trade books, school and dorm supplies, and convenience and cafe items in college and university campuses. The company provides new and used textbooks, as well as textbook rental services; and electronic textbooks and other course materials through NooK Study, a proprietary digital platform. As of october 20, 2011, the company operated 704 bookstores in 50 states, as well as 635 college bookstores served approximately 4.6 million students and faculty members in the United States. It also operates Barnes & Noble eBookstore, as well as provides Barnes & Noble eReader software. The company was founded in 1986 and is based in New York, New York. There has been growing recognition in recent years of the importance of corporate governance in ensuring sound financial reporting and deterring fraud. The audit serves as a monitoring device and is thus part of the corporate governance mosaic. The objective of this paper is to examine the impact of various corporate governance factors, such as the board of directors and the audit committee, on the audit process. Importantly, there is little professional guidance on how auditors should consider such factors when formulating an appropriate audit strategy, and there has been only one prior study on this issue (Cohen and Hanno 2000).

Because there are no current specific auditing standards that relate to the effect of corporate governance on the audit process, we conducted a semi-structured interview with 36 auditors on current audit practices in considering corporate governance in the audit process.

Reflecting on client experiences, auditors indicate a range of views with regard to the elements included in the rubric of "corporate governance". Most significantly, auditors view management as the primary driver of corporate governance. The inclusion of top management in the "corporate governance mosaic" is inconsistent with agency theory's prescription of the board and other mechanisms serving as a means to independently oversee management's actions to protect stakeholders.

Analysis

Barnes & Noble does business -- big business -- by the book and the Nook. As the #1 bookseller in the US, it operates about 1,340 bookstores, including some 705 Barnes & Noble superstores and another 635 college bookstores (25% of sales), in ...