...indicative of the incentive or pressure to perpetrate fraud are WM paid large audit fees as well as other related fees to the external auditor AA. This incentive causes AA to treat WM as valuable client and agree to compromise with the company to commit fraud. The other factor is the strong interest of the management in employing inappropriate means to meet predetermined earnings target. Since the company’s revenue was not growing fast enough to meet those targets, the company management fraudulently manipulated the expenses to inflate earnings. Moreover, the company’s financial performance is threatened by a high degree of competition, primarily in pricing and rendering services, from various sources in all phases of its operations which drive them to manipulate the financial reporting. The second fraud condition is the opportunity to carry out the fraud. Assets and revenues are based on significant estimates that involve subjective judgments and uncertainties that are hard to verify. This gives opportunity for the company to manipulate their accounting methods and estimates in several areas including vehicle and equipment depreciation and landfill cost accounting. The opportunity to commit fraud also exists due to the fact that the CEO and CFO had previously worked as an auditor at AA and some of the accounting personnel were the former AA employees. This situation makes it easy for the fraud to happen. Last but not least, the factors that become the indicative of the attitude...
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...A500 Accounting Ethics—Introduction Lecture Outline * Two Preliminary Questions: 1. Why is ethics taught in accounting, business, and tax schools? 2. Should ethics be taught in accounting, business, and tax schools? I. Why teach it?: * Because of these guys and others like them: Kenneth Lay, Founder Jeffrey Skilling, CEO B.A. and M.A. in economics from the University of Missouri. Ph.D. in economics from Houston University. On May 25, 2006, Lay was convicted of 10 counts of security fraud. On July 5, 2006, while vacationing in Colorado, he suffered a heart attack and died before sentencing. As a result, the federal judge that presided over his trial vacated Lay’s conviction. B.A. in business from the Southern Methodist University. M.B.A. from the Harvard Business School (top 5% of class). Convicted of conspiracy, securities fraud, making false statements, and insider trading. 24-year, four month sentence. The DOJ in 2013 agreed to reduce it to 14 years in return for Skilling releasing $40 million in restitution to victims, held up by appeals. Andrew Fastow, CFO B.A. in economics from Tufts University. M.B.A. from Northwestern University. In 2004, he pled guilty to two counts of conspiracy to commit wire and securities fraud, forfeited $30 million, and agreed to testify. Received a six-year sentence. Now works...
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...Adopting accounting choices for the public and private sectors often triggers debates all over the world. The Public Sector Accounting Standards Board (PSASB) holds the view to adopt a sector – neutral approach. However, debates often occur on whether reporting rules for the public sector should be identical to those which are applicable to the private sector. This essay will discuss the sector – neutral approach adopted by the board, the arguments on the application of accounting concepts which take heritage and community assets of accrual accounting as examples and their effect on meaningful financial information. According to the Institute of Internal Auditors (2011), public sector is comprised of governments, agencies and enterprises which are all publicly controlled or publicly funded and other entities that deliver public programs, goods or services. The new website of the Investopedia (2014) considers the private sector as the part of the economy that is not controlled by state, and is individuals and companies run for profit. Depending on the definitions, public sectors are usually owned or operated by governments, such as educational and health care bodies; private sectors are usually not owned or operated by governments, like retail stores and local businesses (PrivacySense, 2014). Though the differences exist between the two sectors, people hold different views on whether accounting choices suitable for the two sectors should be identical or not. Barton (1999, p....
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...Notes I.28 Session – I important that they would affect the auditor’s report if not resolved. They include the following: • Matters that are significant and involve issues regarding the appropriate selection, application and consistency of accounting principles pertaining to the financial statements, including related disclosures. Such matters often relate to accounting for complex or unusual transactions or to estimates and uncertainties and any applicable management assumptions. Results of auditing procedures that indicate the financial statements or disclosures could be materially misstated or that the auditing procedures need to be significantly modified. Circumstances that cause the auditor significant difficulty in applying auditing procedures he or she considers necessary. Other findings that could result in modification of the auditor’s report. Compliance of Auditing Standards and Audit Documentation – a must for all practice units satisfy any applicable legal or regulatory requirements for records retention. Internationally the norm is assemble the final audit file and submit it for archiving within 60 days from the date of our audit report. The PCAOB standard has shortened this period to 45 days. 51 The auditor would also need to adopt procedures that enable him or her to gain access to the documentation throughout that period. One way for auditors to accomplish this is by creating a policy to maintain electronic documentation. One needs to bear in mind...
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...on pp. 107–113 (Ch. 2) of the text. Answer questions 1, 3, and 4 on p. 113 in 200 to 300 words. When responding to question 3, focus solely on the Enron case. 1. What did Arthur Andersen contribute to the Enron disaster? Arthur Andersen (AA) did not advise the Enron Audit Committee that Enron’s policies and internal control were not adequate to protect the shareholders’ interests even though AA had assumed Enron’s internal audit function (Brooks, 2007, 110). As their accountants they should have had and were supposed to have had reviewed the company's financial condition and truthfully report on that condition. This would have allowed the investors as well as the public to estimate and know about the risk of trusting Enron and investing in the company. They down played the risk which caused their actions to become illegal. Arthur Anderson helped Enron deceive investors and the public by helping the company keep substantial information private. Many people trusted Arthur Anderson, they were seen as being a respectfully and trustworthy accounting firm; they also believed that they were experts in their work which helped legitimized Enron and gave its financial reports and statement credibility that it may not otherwise have had. AA did not establish nor enforce internal controls for Enron, by doing some fraud would and could have been detected, charges and jail time would have been avoided, and the auditing of papers to cover up deficiencies would not have happened. Brooks...
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...An Accountant's Measurement Primer! A primary function of accountants is to develop, implement, and monitor measures of economic resources, business processes and utilization of resources by such processes. Wide varieties of stakeholders use these measures in making a range of economic decisions about business organizations. Pension fund managers, as do stockholders and financial analysts, use accounting information reported by companies to assess the economic performance of those companies and form expectations of future performance. Production managers use accounting information to estimate the cost of products they produce and thus, the relatively profitability of producing more of some products and less of others. Executives use accounting information to budget economic resources among operating units. Stakeholder decisions generally have in common the objective of allocating scarce economic resources to their most productive uses, whether it is managers allocating organizational resources among subunits (or alliances of organizations) or capital owners allocating their capital among organizations (or portfolios of organizations). Consequently, it is vital for accountants to understand measurement concepts (theories) in order to achieve accounting's measurement objectives. We start with a working definition of measurement. Measurement is the assignment of numerals and other symbols to represent the magnitude of an attribute of a phenomenon. 2 A phenomenon is an object...
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...Vodafone Group Plc Annual Report for the year ended 31 March 2012 Creating a more valuable Vodafone We are creating a more valuable Vodafone Our strategy is focused on four areas of growth potential and founded on strong capital and cost discipline. This is delivering results: we have outperformed our key competitors in most major markets, and returned over £10 billion to shareholders in the last 12 months. £46.4bn £11.5bn Group revenue increased 1.2% to £46.4 billion with a strong demand for data services and further voice penetration in emerging markets. Adjusted operating profit was £11.5 billion, slightly down on last year (up 2.5%* on an organic basis) supported by a good performance from our US associate, Verizon Wireless. £6.1bn Free cash flow of £6.1 billion, decreased due to the sale of our interests in China and France and a lower working capital benefit. 9.52p Total ordinary dividends per share of 9.52 pence, up 7.0% in line with our dividend per share growth target. We also paid a special dividend of 4.0 pence per share and our £6.8 billion share buyback programme is almost complete. £6.4bn Capital expenditure increased by 2.3%, as we continued to maintain our high level of investment to support our network strategy. 14.91p Adjusted earnings per share of 14.91 pence, down 11.0% on last year, resulting from the loss of income following the sale of several businesses and higher financing costs. Vodafone Group Plc Annual Report...
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...ATTACHMENT A: GENERIC TRAINING PLAN EY Zimbabwe – 2013 Instructions for completion · This is a generic training plan for ONE hypothetical trainee · All applicants must complete all the sections TRAINING PLAN Elective: Auditing & Assurance Residuals: Taxation Management Decision-Making & Control Financial Management Internal Audit, Risk Management and Governance COMPULSORY SKILLS BUSINESS ETHICS Mode through which competence will be achieved (i.e. practical experience/ simulation Competency to be achieved BE(C) Acts ethically and in accordance with the rules of professional conduct Tasks to be performed BE(C)1 Displays honesty and integrity BE(C)2 BE(C)3 BE(C)4 BE(C)5 BE(C)6 BE(C)7 BE(C)8 Carries out work with a desire to exercise due care Maintains objectivity and independence Avoids conflict of interest Protects the confidentiality of information Maintains and enhances the profession’s reputation Adheres to the rules of professional conduct, including the ICAZ Code of Professional Conduct Identifies and adequately responds to potential ethical dilemmas Examples of activities to be performed by trainees to gain exposure to this competence E&Y Firm values – Our shared values inspire our people worldwide and guide them to do the right thing, and our commitment to quality is embedded in who we are and in everything we do. Our values define who we are · · · People who demonstrate integrity, respect and teaming People with energy, enthusiasm and the courage to lead People who...
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...(12F353) & Nikhil Vanage (12F360) SCM Introduction Activity-based costing (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing. CIMA (Chartered Institute of Management Accountants) defines ABC as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities, and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs. Aims of model With ABC, a company can soundly estimate the cost elements of entire products ACTIVITIES and services. That may help inform a company's decision to either: * Identify and eliminate those products and services that are unprofitable and lower the prices of those that are overpriced (product and service portfolio aim) * Or identify and eliminate production or service processes that are ineffective and allocate processing concepts that lead to the very same product at a better yield (process re-engineering aim). In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to its customers. ABC is generally used as a tool...
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...UNIVERSITY Use of Theses This copy is the property of the Edith Cowan University. However the literary rights of the author must also be respected. If any passage from this thesis is quoted or closely paraphrased in a paper or written work prepared by the user, the source of the passage must be acknowledged in the work. If the use desires to publish a paper or written work containing passages copied or closely paraphrased from this thesis, which passages would in total constitute an infringing copy for the purposes of the Copyright Act, he or she must first obtain the written permission of the author to do so. USERS AND ACCOUNTING INFORMATION PREFERENCES OF GOVERNMENT DEPARTMENT FINANCIAL REPORTS by Helen R Mignot B (Bus) A thesis submitted in partial fulfilment of the requirements for the award of Master of Business (Accounting) at the Faculty of Business Edith Cowan University Date of Submission: 05 February 1996 ACKNOWLEDGMENTS AND DEDICATION I wish to thank all those who provided...
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...July 25, 1999 Chapter 2: Normative Accounting Theory The purpose of this chapter is to identify those characteristics of accounting information that are thought to make one system of accounting better than another. Since the material is based on eighty years of accounting research, by countless researchers, it is clearly neither possible nor desirable to review all the arguments, or even the main arguments, used by advocates of all the different competing accounting systems. For instance, it would be difficult to improve on Henderson and Peirson's [1983] 268-page thorough, balanced, well-documented portrayal of the evolutionary development of accounting thought from the "pre-theory period" (1494-1800), through the "general scientific theory period" (1800-1955), and the "general normative theory period" (1956-1970), to the "scientific theory period" (post-1970). The approach adopted for this chapter is therefore to aim for a concise summary of the products of normative accounting theory. The objective is to search for common ground wherever possible, without ignoring important differences. What is reported is intended to cover most of what is said to be "good", "useful", or "desirable" about accounting information. The four-step structure of this chapter is depicted in Figure 2.1 (next page). To begin with, a search of the literature identifies three main Objectives of Accounting. This list of objectives, which is presented and discussed in Section 2.1, is intended...
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...JOURNALOF ELSEVIER Journal of Accounting and Economics 18 (1994) 157-179 Accounting &Economics Earnings management preceding management buyout Susan E. Perrya, Thomas offers b H. Williams** “School of Commerce. University of Virginia, Charlottesville, VA 22903-2493, USA bSchool of Business, University of Wisconsin, Madison, WI 53706, USA (Received February 1992; final version received March 1994) Abstract There are frequent expressions of concern in the accounting, economics, and legal literature about managers’ conflicting duties and incentives in management buyouts. This study is motivated by a concern about the managerial incentive to reduce reported earnings prior to the announcement of the buyout proposal. Our analysis of a sample of 175 management buyouts during 1981-88 provides evidence of manipulation of discretionary accruals in the predicted direction in the year preceding the public announcement of management’s intention to bid for control of the company. KeJ’ words: Contracting; JEL classification: Earnings management; Accruals; Management buyouts G34 1. Introduction Firms involved in going-private restructurings provide unique opportunities to investigate important accounting, economic, and legat issues. The accounting *Corresponding author. The authors want to thank Sharad Asthana, Larry Brown, J. Stanley Fuhrmann, Jerry Han, Jim McKeown, Steve Rock, Terry Warfield, Richard Willis, the workshop participants...
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...Business Plan Business Overview The ventilation and air conditioning (VAC) industry deals in system, ventilation, and air – conditioning of buildings .The ventilation, and air-conditioning are interconnected, as it provides livable temperature in an indoor facility within reasonable installation, operation, and maintenance costs. Basically, VAC systems is designed to provide ventilation, reduce air infiltration, and maintain pressure relationships between spaces. The ventilation and air conditioning (VAC) industry is indeed a very large industry that covers operation and maintenance, system design and construction, equipment manufacturing and sales. Going forward, the demand for ventilation and air conditioning (VAC) services is projected to increase as the growth in the real estate industry and the decrease in the electricity tariffs in the recent past will definitely translate to growth in the ventilation and air conditioning (VAC) industry. The Air-Conditioning Contractors industry is not dominated by any company. As a matter of fact, no company can boast of having more than 5.0% of the total annual revenue in the industry. The major players in the ventilation and air conditioning (VAC) industry are .0smaller firms that specialize in kinds of VAC systems or dominates a certain location. The ventilation and air conditioning (VAC) industry is indeed a very large industry and pretty much thriving in all the parts of the world especially in developed countries such as United...
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...crompton greaves limitedWipo Limited | MANAGERIAL ACCOUNTING | ASSIGNMENT 03 | | SUBMITTED BY PRIYAL CHOWKHANI R1301038 PGDM 2013-15 1. Vision/Mission statement of the Company’s Promoters and their management philosophy. Vision Statement Vision statements help to describe the organization's purpose. Vision statements also include the organization values. Vision statements give direction for employee behavior and helps provide inspiration. Strategic plans may require a marketing strategy, which could include the vision statement to also help inspire consumers to work with the organization. Vision of Crompton Greaves Limited- To become a Leading Appliances brand by offering technically superior products & services and qualitative after sale service thus enhancing the quality of life of every consumer, through an engaged team. Mission Statement Leaders should emphasize the current mission statement to employees, which clarifies the purpose and primary, measurable objectives...
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...DECEMBER 21, 2012 CORPORATES RATING METHODOLOGY Global Pharmaceutical Industry Summary This rating methodology explains Moody’s approach to assessing credit risk for companies in the pharmaceutical industry globally. This document is intended to provide general guidance that helps companies, investors, and other interested market participants understand how key qualitative and quantitative risk characteristics are likely to affect rating outcomes for companies in the pharmaceutical industry. This document does not include an exhaustive treatment of all factors that are reflected in Moody’s ratings but should enable the reader to understand the qualitative considerations and financial information and ratios that are usually most important for ratings in this sector. This rating methodology replaces 1 the Global Pharmaceutical Industry Methodology published in October 2009. While reflecting many of the same core principles as the 2009 document, this update provides a more transparent presentation of the rating considerations that are usually most important for companies in this sector and incorporates refinements in our analysis that better reflect key credit fundamentals of the industry. No rating changes will result from publication of this rating methodology. This report includes a detailed rating grid and illustrative mapping examples that compare historical performance on factors in the grid to ratings of companies covered by this methodology. The purpose of the...
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