Toyoya and Ford Companies Comparison

Document Type:Research Paper

Subject Area:Accounting

Document 1

Due to increasing competitions, companies have opted to adopt a strategy that is friendly to the cost of production thus initiating innovation and research to improve their brand. Ford, for instance, has shown improved financial returns over the years and it has retained its market share for a long period. The same case applies to the Toyota Company. The growth of the two companies, therefore, becomes of interest of study specifically, in order to investigate the factors that facilitate the success of these companies and the secret behind their strong brand. BRIEF HISTORY OF FORD The ford company was started in 1903 by a man called Henry Ford and the company has for the years remained under the management of the Henry Ford Family.

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The company began in 1933 as a division of Toyoda Automatic Loom Works, Ltd. ; which is a Japanese manufacturer. In 1941 the company was well established but later in 1945, it suspended the production of automobiles due to economy chaotic and the effects of World War 2. Later in 1950, the company initiated the production and on a keen study about the USA market, Toyota became very competitive and is currently the best-selling company. PART TWO INTERNAL CONTROL FORD The board of directors’ audit committee chooses and contracts an independent public accounting firm that is registered. All upcoming activities and services that are above $250000 are tabled and the committee does the scrutiny and endorsement. Reporting is done from the above information, this is done for each activity showing the expenses and real fees committed ("Notice of 2017 Virtual Annual Meeting of Shareholders and Proxy Statement", 2017) Internal control According to the form 10-k ford fiscal year 2017 report, the PWC audited the consolidated balance sheets, income statement, cash flows, equity for a period of three years ending 31 December 2017.

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this also included relevant notes and financial statements Schedule. The PWC did auditing to the internal controls over financial reporting, this is according to the rules and procedures acceptable, and this was provided by the committee of sponsoring organizations for Treadway Commission (COSO) (“Ford Motor Company, 2018) According to the PWC report in form 10-k, the ford company applied all internal controls over the financial reporting for the year ending 31 December 2017. the PWC confined to all rules and guidelines set in internal control and integrated procedure established by COSO to come up with the company’s monetary situation. Because of its intrinsic limitations, it’s hard to notice and stop misstatements. Still, it’s hard to make future projections or evaluations due to varying conditions, level of agreement with procedures and rules controlling the company operations Financial strategy and analysis In the year 2016 ford had $4.

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6 billion, this was the net income, and the pre-tax valuation profit was at $10. 4 billion. The company became position two overall. This was inclusive of the automotive segment which recorded a profit of $7. 3 billion. North America drove the automotive results to these levels, the areas that are not in North America recorded $252 million loss. The year 2016 was the time when the great loss was recorded due to the Brexit impact in Europe, the company recorded a $925 million loss. The total revenue for the company in the full year 2017 was $156. The company’s executive meeting makes recommendations on audit and supervisory board selection when picking the outside auditing members the company considers the applicants in line with the necessities set by the companies act and the official financial tools exchanges.

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The individual remuneration of the audit board members is effected based on the responsibilities and deliverables for each individual. The standards for each country’s remuneration is put into consideration when effecting the amounts and the procedure. These remunerations for the audit members is a fixed basic payment without bonuses and is agreed on by the audit and supervisory board and the procedures put across by the shareholders. Internal control The Toyota Company work according to the guiding principles and the effective code of conduct. The aim of stability approach is to create a strong foundation on finances and this will help the Toyotas sustainability growth in long-term to ensure continuous growth the company believes that the adoption of the new trends and technologies such as automated driving, robotics and artificial intelligence (AI).

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Therefore the company is giving attention to strengths affecting today and tomorrow growth. The company has started initiatives to promote growth in Toyota AI ventures and other partnerships. Consolidated Financial report 2017 The financial analysis reviewed the development environment for economic growth year 2017 in accordance with the world economy, the United States market has shown tremendous improvement while the European economy has indicated an even growth and recovery. Weakness in market penetration has been recorded in the emerging economies. 5 decrease compared to 2016 FY (26. 5%) Net income 1,831. 5 decrease compared to 2016 FY (20. 8%) The major loss contributing factors in the financial year 2017 include changes in the rate of exchange, increase in expenses, reduced marketing efforts and cost reduction efforts. Comparison between Ford and Toyota Motor Company The ford company posted a recommendable profit improvement in subsequent years as compared to the Toyota Company.

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The company should increase the marketing power to the rapid expansion in the new countries by market study, monitoring and understanding the customer needs. Toyota Company should make the Lexus car model a priority in the Chinese market to enable venturing into luxury segment of the motor industry. The Toyota Company should also engage in the manufacture of energy saving, environmentally friendly products while including all the customer needs. The company should embrace the observation of rules and regulations that abide it to the core values of the organization and development of human resources. The company should focus on industrial support by ensuring continuous product supply in order to satisfy the human needs. References Charter of the Audit Committee of the Board of Directors.

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