¶ … risks facing this company that immediately need to be addressed. The major risks include the fact that the company has already violated a number of the premises upon which the company was formed. Those premises are the close relationship with a number of sunglass manufacturers, the product value and the brand development. Additionally a risk assumed by the company was that they were providing an untested product to untested sales people; these are individuals who have no previous ties to the company. It was nice that Evan was able to establish a relationship with Mark and Judy Chen, and that is a good start along with the fact that they would oversee the operations in Hong Kong. However, the trust put into Mark and Judy is one that is double-edged in nature. If they do not do their job in an efficient manner, who then will coordinate the manufacturing activities? Another risk that faces the company is the 'knock-off' look and feel of the sunglasses. The success of the company hinges on providing a quality product at reasonable prices, not in providing a product that 'appear disappointingly inexpensive'.
2. The firm's marketing strategy does affect the company's accounting principles and practices due to the fact that independent commissioned sales reps will be charged with distributing and selling the product. An accountant might want to forewarn Evan and Nicki that a sales force that was independent and commission might mean lower expenses in the beginning, but that there is inherent risk involved with establishing a firm in that manner. Risks include the fact that it would be difficult to track and maintain inventory.
Additionally, commissioned reps are not employees and certain rules and regulations would have to be followed regarding employee status, and that...
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