We have learned from an employee of Windfall, Ltd., that its accountin

Hey there. I am neither an expert but I think you basically did a great job. Nonetheless, there is something to be addressed regarding the content of the essay. IMO, your second point coincide with the third one. They sound to be the same thing. You are contending the idea of a complete check but suggesting to do sampling rather. (This happens to be the case of auditing lolll.)

Your first point is that the kind of errors is not necessarily recurring (I am not sure about this, because carelessness is never one-off IMO). And second is that invoices of some transactions are simply not material enough (not involving much money), so they are not worth a check. This reasoning actually implies the cost benefit analysis, which is your third point.

I found another angle that you may well feel worthy to mention. This manager just overheard from an employee of the client company. We are not sure about the position of this employee (whether he works in the accounting department or supervises something of the sort) and the reliability of the information source. Error correction does not seem to be something that a company would voluntarily disclose. So is blabbing from a plain biscuit reliable? I would definitely ask the manager to do fact check.

Further, why would the manager think that the consulting firm can get the Windfall account? If the company can find the error itself, the consulting firm does not help much by suggesting or facilitating the idea. We should ask the author of the argument to amplify the means of approaching clients.

Above are all I have come up with so far. Hopefully you find it helpful. Cheers on the exam prep and break a leg at the real thing!

The employee of the financial management and consulting firm believes that if the firm recommends each of its clients to institute a policy of checking all purchasing invoices for errors, it might be able to land the Windfall account, who he believes will be impressed by their thoroughness and rigorousness. But as it currently stands, this recommendation ignores some important concerns that should be addressed to make this argument more convincing.

Firstly, the employee hasn’t provided any data regarding the source of the error and the thought process involved in checking only 10% of the invoices. An accountant at Windfall probably realised that he had made some calculation errors or that its books were not balanced causing Windfall to initiate a search for inconsistencies. Moreover, no data is provided regarding how the '10% of invoices' were picked - randomly or from a particular area (this could’ve been the area of the books that weren’t adding up).

Another flaw in the recommendation made by the employee is that he hasn’t accounted for the time, effort and resources that will need to be spent in order for them to do a thorough search. It makes sense to review the data only if there is a known flaw in the accounts or provided the intended corrections will result in a gross overall profit or prevent a major payout as it did in the case of Windfall. Additionally, he takes for granted that every client will have the resources available to conduct this operation.

Finally, the employee believes that this thoroughness from each of its clients will earn his firm the Windfall account. If Windfall could find the flaw itself, what makes him believe that it will come on-board.

Had the employee added some stats as to the average number of mistakes firms make in their books on an annual basis or more specifically, companies within each industry, his request would’ve been more substantial as it isn’t merely taking what could be a one-off, as in the case of Windfall. He should’ve also provided some basic calculations based on this information to suggest what the potential gains could be for the time and effort spent. He should’ve also mentioned why Windfall might be inclined to choose them as their partners by adding what value his firm could bring to them in addition to the review of invoices.

Instead of jumping the gun and making an unsubstantiated request, had the employee supplemented his recommendation with some of the items mentioned above, his argument would’ve been more thorough and convincing.

Can anyone comment on my essay?

The following appeared in a memorandum from a member of a financial management and consulting firm:

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

Essay

The memorandum claims, based on evidence of Windfall Ltd. employee, that the consulting firm should advise each of its clients to institute a policy of checking all purchasing invoices for errors. Further, based on this recommendation, the memorandum goes on to claim that such an action could help the firm get the Windfall account by demonstrating to Windfall the rigorousness of the firm's methods. Stated in this way the argument is totally uncovincing and inconclusive.

Firstly, it shows the naiveity of the consulting firm's member to base his recommendation on an employee of Windfall Ltd. There is no attmept by the member to validate the evidence provided by the employee. The employee would have sound more convincing had he given the figures of previous years and also of other similar firms. It is thus incorrectly assumed that the evidence provided by employee is correct and therefore to be taken at face value.

Secondly, let's assume for a moment that the evidence cited by the employee is indeed correct. But would it be wise to institute such a drastic measure as to check all purchasing invoices for errors ? Would not it have time and cost implications for the companies? For example, how would a company like Amazon be able to check all its invoices for errors when it has millions of transactions happeing in a day? Also, the member of consulting firm has not even attempted to provide explanation as to how he intends the companies to check the invoices - whether manually or automated or both. Thus, the claim that the firm's clients should check all purchasing invoices is rather a case of shooting in the dark.

Lastly, if the above-mentioned claims were not sufficient, the member ridiculously concludes that on employing the cited recommendation, it shall help the firm to get the Windfall account. This claim is a stretch and totally unconvincing. How can the firm infer that the client would be able to avoid overpayments at such a large scale ? What if Windfall Ltd. already has a sound strategy in place to check its invoice in an automated way and 10 percent of invoices which were checked were flagged by accounts department. Therefore, there is no merit to the member's claim.

In view of the above, it is certain that the claims of the member of the consulting firm are baseless and unsubtantiated. The member would do more good if he provides insight into working of account department of Windfall Ltd. and bases his claims on clear-cut evidences.

Hi all,

Just started AWA prep. Appearing for GMAT in 5 days. Please let me know your inputs. Thanks in advance and stay safe.

Prompt

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

Response

The member of a financial management and consulting firm states that the firm should advise all its clients to institute a policy of checking all purchasing invoices for errors. According to the member this will lead to an increase in net gains for the firm's clients as it led to savings for Windfall, Ltd. As it stands, the argument seems to commit the mistake of i) correlating savings to net gains, ii) extrapolation of net gains for all clients based on observation of one company, iii) data bias as it bases the conclusion on only 1 months observations

First, the argument readily assumes that any savings in overpayments is directly related to net gains. It fails to account for additional costs that might have been incurred to check the invoices for errors and inconsistencies. For example, although Windfall saved $10,000 in overpayments, it might have had to hire 2 additional people to check for the errors which would have cost Windfall $15,000. In this case, there would be a net loss vs. net gain. Had the argument been inclusive of the costs incurred to realize the net gains, the argument would be able to defend the monetary value proposition of implementing such a policy.



Second, the argument mentions this policy will increase net gains for all clients. This depends on the assumption that the other clients make the same mistakes in invoices as does Windfall, Ltd. This seems to be a stretch as it doesn't account for any company-specific factors which might have led to the inefficient invoicing in Windfall, Ltd. For example, it could be that Windfall still operates all of its invoices manually which leads to errors vs. the other companies might be using software/tools which are more accurate. In this case, the net gains wouldn't be the same for other clients and the effort (both time and money) spent to institutionalise this policy would be fruitless. Had the argument drawn a correlation between the causes of errors and inconsistencies in invoicing across both Windfall and other clients, it would be more logical to expect net gains from a similar policy.



Third, using impact from just one month of data to generalize the impact across all time periods is a big leap of faith. There could be multiple other factors that drove one-time inconsistency in invoicing during the period of last month. For example, the main person handling invoices could have been on leave, system changes, etc. If the argument included research over a broader period of time leading to similar results, the savings potential would be more real.



Overall, because of the reasons mentioned above the argument is logically flawed and has used multiple extrapolations to arrive at a hasty conclusion. The premises of the policy implementation need to be strengthened and backed by data across multiple time periods and more companies. Without this, the argument is open to debate.

On which prompt this essay is based?

On which prompt this essay is based?

Hi Sajjad1994,

The prompt is as below:-

The following appeared in a memorandum from a member of a financial management and consulting firm:

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

Request if you may analyse my AWA answer above too.

Thanks!

Good Luck

Thanks a ton! That's very comforting to know.

However, I thought AWA is rated in steps of 1.

Please clarify.

You find every detail about AWA in the post in link below

https://gmatclub.com/forum/the-gmatclub ... 36251.html

Best

Hi Sajjad,

Prompt below:

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

Apologies, will mention the prompt along with my essays going forward. Thanks for your help. Please grade my essay too.

Regards,
Ritwik

Good Luck

Please evaluate my essay. Thanks!

Prompt:

The following appeared in a memorandum from a member of a financial management and consulting firm:

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

Essay:

The argument states that a certain financial and management firm should advise its clients to institute a policy of checking all purchasing invoices for errors, so that the clients can increase their net gains. This claim is made on the basis of information received from an employee of Windfall Ltd, that its accounting department manage to save some $10,000 in overpayments by checking 10 percent of their last month's purchasing invoices for errors. The argument also states that advising clients to check all their purchasing invoices might also help the firm to get the Windfall account. I find the argument unconvincing for several reasons.

First, the argument uses the example of Windfall Ltd. to conclude that checking all purchasing invoices will lead to an increase in the next gains. This conclusion is problematic because it fails to compare the cost of checking all of the past month's purchasing invoices to the money saved by a company. Windfall managed to save $10,000 from checking only 10 percent of all purchasing invoices. It is possible that Windfall chose not to check more than 10 percent of the invoices because the cost of doing so would have outweighed the gains, hence reducing the profits. In such a case, advising the clients to check the invoices might backfire.

Second, the argument's claim that the recommendation to check the invoices could help the firm get the Windfall account is problematic. As per the argument, the idea to check the purchasing invoices originally came from Windfall itself. If Windfall gets the same recommendation from the firm, the decision makers might think that giving their account to the firm is a waste of money, since the firm is not providing Windfall with anything they don't already have. In such a case the firm might end up actually pushing Windfall away.

To conclude, I believe that this argument will become a lot more convincing the issues mentioned above are dealt with. The argument needs to include a cost benefit analysis, weighing the cost of checking all purchasing invoices against the expected gains. The argument also needs to include the things that the firm could actually help Windfall with. Doing so, would make the conclusion drawn in the final statement of the argument a lot less problematic.

Good Luck

Hi Sajjad1994 have written an essay on the same prompt. Would request you to go through it and give your views. Appreciate it.

Prompt:

The following appeared in a memorandum from a member of a financial management and consulting firm:

“We have learned from an employee of Windfall, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”

The given argument states that the member of a consulting firm plans to recommend checking of all purchasing invoices for all its clients in the hope of increasing the client's net gains and also securing the Windfall account. Stated this way the argument is weak and unpersuasive. It overlooks certain key factors and makes certain faulty assumptions which render the argument fallacious and unconvincing.
Most conspicuously, the argument assumes that just because a certain policy may have lead to certain supposed gains in a particular company the same factors may generate net gains for the firm's other clients. However this may not be the case. For example, if there was a particular source of doubt or some change in operating systems for Windfall because of which such a check may have become necessary or would have created positive results or net gains. Another client not having those concerns may not benefit from checking of the invoices. On the contrary the client may perceive it as a burdensome overhead. Clearly, certain client specific factors need to be looked at to arrive at the conclusion.
The member of the firm also supposes that if less is good so more must be better. This may not always be the case. For instance a very intensive check of all the invoices may lead to high personnel and operational costs rendering the exercise futile. The exercise instead of yielding net gains could cost the client money and time. The cumbersome exercise may also demotivate the work force. The argument before asserting genration of net gains needs to consider the exact costs and benefits accruing to a particular client before making the said recommendation.
The member of the firm also states that by giving this advise the firm will be able to secure Windfall's account. Clearly, this may not be the case. Windfall may not perceive this"rigor" to be a desirable attribute and may consider this an annoyance or excessive exercise with no proportionate gains. Thus they may not be able to impress Windfall because of such a blanket recommendation.
Windfall may also consider several other factors before appointing a firm or entailing a professional's services. The argument incorrectly assumes that the decision of Windfall is squarely based on someone giving rigorous advice. There are several key factors that may go behind employing the services of a firm. The argument overlooks those factors. The argument could be strengthened if it mentioned the factors that Windfall deems necessary or considers important in making its appointment decisions.
Thus the argument overlooks several key factors. The argument makes several unsubstantiated assumptions that render the argument weak and unconvincing at best. If the argument mentions more clearly the above discussed factors and provides further evidence to substantiate the claims the argument can be strengthened.

Good Luck

Hello

I just wrote this AWA, would everyone provide me with a feedback please

"
The argument states that the consulting firm should encourage its client to put in place an invoices checking policy in order to help the save money. This argument demonstrate several flaws and lack of rigorous demonstration.

First, the argument relies on an isolated example of a huge finding in overpayment in only ten percent of purchasing invoices of the Windfall company. This is quite an impressive sum that may certainly be sparse. The argument would have been much stronger if it had provided additional outcomes of similar checking made at other time periods or by other firms, since this overpayment may be due to lack of professionalism specific to Windfall company.

Secondly, this argument assumes that checking purchasing invoices will necessarily help companies to save money. It does not take into account that checking purchasing invoices cost time to employees, time during which these employees are paid by their company. Therefore, there is a cost for a company to check its purchasing invoices, and this cost should be considered when suggesting to institue a policy. Indeed, the balance between cost of such policy to a company and gain from finding overpayments may well be negative, making the company lose money.

The argument could have been more wise in suggesting a less extreme rule than checking all the purchasing invoices. Starting with a small quantity of invoices to review, as did Windfall, would be a clever first step to evaluate the probability of finding errors. Then, if no error were to be found, the company could stop the process and not spend unecessary additional time of its employee on a task unlikely to be relevant.

Finally, it is doubtfull that the financial management and consulting firm will gain Windfall as a client just by recycling an initiative of this same firm. Even worse is that the memorandum suggest a less clever approach than the one of Windfall. The consulting company would be more wise to suggest to Windfall a method to avoid any error purchasing invoices, as it seems to be an issue in this company.

To conclude, the argument focuses on a single isolated example that fails to provide solid ground to the money saving method that is suggested. 
"

Thanks ++++