Stock Performance Downgrades and Audit Risk Assessment in Multinational Corporations
Overview
This paper examines stock performance downgrades in three multinational companies—U.S. Steel Corp, Urban Outfitters, and Fluor—analyzing the factors contributing to their decline. The author discusses how auditors can use financial information and market analysis to evaluate risks, and explores the implications of these downgrades on the audit risk model's three components: inherent risk, control risk, and detection risk.
What this coursework covers
- Analysis of U.S. Steel Corp stock downgrade and steel price fluctuations
- Examination of Urban Outfitters performance decline and competitive market pressures from e-commerce
- Discussion of Fluor stock decline following strategic review and dividend cuts
- Application of audit risk model framework to downgraded companies and risk assessment implications
Preview
Discussion Topic Week 4
Student Full Name
Institution Affiliation
Course Full Name
Instructor Full Name
Due Date
Discussion Topic Week 4
U.S Steel Corp Stock is one of the companies that have experienced a downgrade in stock performance. U.S Steel Corp Stock is a multinational company that has dominated the steel industry for decades. Previously the steel prices had gone up for several months before the stock performance was degraded (Susan, 2019). In this case, the auditors can use the information to determine the price changes and the company's management to evaluate the risks associated with downgrading. Urban Outfitters is a lifestyle company, and its stock performance has decreased by -0.37% with 3-star ratings. Auditors can use the information from the company’s records to analyze the impact of depreciation.
An auditor can use the information to evaluate competition in the market. For instance, companies like Nike and Adidas used to sell their merchandise through the platform, but now they are selling them through their e-commerce sites. Fluor stock has been on the downside for several months since 2019, after the company decided to set new review strategies (Susan, 2019). the Fluor company cut share returns and dividends, which scared investors away. The company's nature and management is a primary way to evaluate the risks associated with downgrading for the Fluor company.
The audit risk model comprises detection, control, and inherent risks. The information derived from the downgrading companies can have a significant impact on the audit risk model.