A business model analysis provides the auditor with a basis for determining the unique issues that the client faces in its operations by identifying and analyzing the firm's suppliers, competitors, buyers, external agents, and so forth. Many companies can say that they are a supplier, a competitor, and a buyer to themselves. One such company is General Motors.

a. Construct a business model for General Motors by referring to Figure 5-6, which concerns a publishing company.

b. What is a major implication to the auditor of General Motors of such a high level of integration (that is, being a supplier, competitor, and a buyer all at the same time)? Specifically, what transactions or balance sheet items should the auditor be more concerned with than usual as a result of GM's business model?

Figure 5-6

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Economy External Agents Literary Critics Government Taxing Authorities Financial Analysts Education Strategic Partners Literary Agents Authors Bookstores Book Clubs Resources and Suppliers Paper Producers Printers Shareholders Technology Suppliers Courier/Postal Employees Internal Processes Strategic Management Primary Processes Author Development Printing and Production Sales and Distribution Resource and Support Processes Information Management Property Management Human Resource Management Financial Management Markets, Customers, and Products Independent Bookstores Bookstore Chains Book Clubs Libraries Retail Businesses Internet Retailers Individual Readers Competitors Direct: Other Publishers Indirect: Television Movies Live Theatre Internet