...Review of Accounting Ethics Review of Accounting Ethics Dr. ACC 557: Financial Accounting May 22, 2013 Table of Contents 1.0 Corporate ethical breaches in recent times. 3 2.0 Accounting ethical breaches and their impacts 3 2.1 The Scandal of Enron 3 3.0 Organizational ethical issues and the management failure 5 4.0 Breach of the accounting practices and its impacts 5 5.0 Recommendations by the CFO 6 6.0 References 8 1.0 Corporate ethical breaches in recent times. Ethics is an important aspect of business in today’s enironment. Sometimes management ignores or leaves to state laws to govern the code of ethics within a company. Companies have faced a lot of issues regarding ethical situations in modern times. According to Baker (2012) contrary to the popular belief of the recent global financial crisis resulting from failures of accounting ethics, he argues that there is not enough evidence to support this connection. 2.0 Accounting ethical breaches and its impacts Breaches of the accounting ethical policies have become a source of concern for the firms today. The proper application of IFRS and GAAP standards is vital for each firm. In recent years as more scandals have come into the spotlight firms have taken more and more internal measures in addition to the policy making at the governmental level to ensure breach of consumers’ trust and laws does not take place in the future. There has been a tremendous increase in the interest in accounting ethics (Cowton, 2013)...
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...REFERENCES……………………………………………………………………………..….25 SUMMARY OF TERMS ISA: International standards of Audit KPC: Kenya Pipeline Company IAASB: International Assurance Audit Board IFAC: International Federation of Accounting USD: United States Dollar KCB: Kenya Commercial Bank BCCI: Bank of Credit International SEC: Securities and Exchange Commission ABSTRACT The way in which auditors perform their duties and the auditing profession in general raises questions and puts the auditors on the spotlight from clients who rely on their reports. Questions on whether the public trust the way auditors perform their secondary duty of detecting errors and frauds, the reliability, completeness and accuracy of their auditing reports have been raised. The research focuses on; Management and auditors’ responsibility for its prevention and detection of fraud, the auditor’s responsibility for reporting fraud to management. The primary responsibility for prevention and detection of errors and irregularities rests with management. This responsibility arises out of a contractual duty of...
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...Universidad Autónoma de Nuevo León Facultad de Contaduría Pública y Administración International Business Program Human Resource Management Marcelo de la Rosa Integrated Business Project Grupo Villacero Student Name | Student ID | Lucero Reyes Chapa | 1592824 | Sandra Patricia Romero Leos | 1582746 | Karla Daniela Lara Moreno | 1587671 | Lucero Dávila Llerenas | 1599511 | Efrén Huerta Aguilar | 1692895 | Roberto Carlos Hernández Díaz | 1693016 | Group: 5Bi November 5th, 2015, Cd. Universitaria de Nuevo León GRUPO VILLACERO HISTORY Villacero is Mexican steel distributor company that was founded in 1955, as company Materiales de Fierro Monterrey. It was not until 1970 when Villacero was consolidated and expanded its activities in steel processing services. In November 2006 Villacero and C & F acquired a significant share of Adelphia Metals, the third largest distributor in North America rods. In 2007 Villacero formed a strategic alliance with ArcelorMittal to form a joint trading company to serve the domestic and US markets. With over 55 years of experience, Villacero is a leading Group in Mexico that stands out worldwide in more than 34 countries through marketing, processing and logistics in the steel sector. It has large activities that provides to the most varied market segments such as: Distributors, Construction, Housing Developers, general industry, government, and international trade, among others. Villacero is a responsible company...
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...Accountants (AICPA) issued Statement on Auditing Standards No. 99(SAS No. 99) to improve investor confidence and the auditing function’s ability to detect material frauds. The intent of this thesis was to look at the fraudulent factors associated with several recent corporate frauds and compare them to the standards set by SAS No. 99. Through the analysis conducted, this thesis looks at the relationships between pressures, opportunities, and rationalizations made during the act of fraud. Table of Contents ABSTRACT ii INTRODUCTION 1 Sarbanes – Oxley Act of 2002 (SOX) 1 Statement of Auditing Standards Number 99 (SAS No. 99) 4 Parts of the Fraud Triangle 5 Types of Fraud 11 INSTANCES OF FRAUD 13 Enron Corporation 13 Adelphia Communications Corporation 17 AOL Time Warner, Inc. 20 Bristol-Myers Squibb Company 25 Global Crossing Limited 27 K-Mart 30 Tyco International, Ltd. 34 WorldCom 37 HealthSouth Corporation 41 CONCLUSION 45 Appendix: SOX Titles and Sections List 48 Works Cited 52 INTRODUCTION Between the years 1998 and 2002, the United States suffered a time in which several large companies engaged in...
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...CASE STUDY – LETTER FROM PRISON ETHICS 1. In an interview with the New Zealand Herald, Stephen Richards commented “World Com bankrupt, Enron bankrupt, Adelphia bankrupt. Computer Associates is a radically different environment to those.” Do you agree/disagree with Richards’ comment? Why/Why not? Discuss the ethical implications of the fraud committed at Computer Associates. In your response you should refer to Part A of the Code of Ethics of the Australian Accounting Profession discussed in Chapter 29 of the text. (25 marks) EARNINGS MANAGEMENT 2. “Numerous pieces of evidence suggested that earnings management – the managerial use of discretion to influence reported earnings – was a widespread corporate practice at Computer Associates.” Distinguish between accrual-based earnings management and real activities manipulation. Explain what is meant by a trade-off between the two. Which type of earnings management was practised at Computer Associates? Academic support should be provided (see the attached reference list) from at least two articles. (25 marks) CORPORATE GOVERNANCE 3. Corporate governance is defined as the system by which companies are directed and controlled" (Cadbury Committee, 1992). Discuss the role of specific corporate governance mechanisms that may have alleviated earnings management at Computer Associates. Academic support should be provided (see the attached reference list) from at least two articles. (25 marks) LOBBYING 4. The fraudulent...
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...International Journal of Smart Home Vol. 3, No. 1, January, 2009 SOX and its effects on IT Security Governance Rosslin John Robles1, Min-kyu Choi1, Sung-Eon Cho2, Yang-seon Lee2, Tai-hoon Kim 1 School of Multimedia, Hannam University, Daejeon, Korea 2 Dept of Information Communication, Sunchon Univerity, Sunchon, Korea 3 Fumate Inc., Daejeon, Korea rosslin_john@yahoo.com, secho@sunchon.ac.kr, yslee@fumate.com, taihoonn@empal.com Abstract The Sarbanes-Oxley (SOX) Act is a United States federal law enacted on July 30, 2002 in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. This paper discusses the effects of Sarbanes-Oxley (SOX) Act on corporate information security governance practices. The resultant regulatory intervention forces a company to revisit its internal control structures and asses the nature and scope of its compliance with the law. This paper reviews the implications emerging from the mandatory compliance with Sarbanes-Oxley (SOX) Act. Issues related to IT governance and the general integrity of the enterprise are also identified and discussed. Industry internal control assessment frameworks, such as COSO and COBIT, are reviewed and their usefulness in ensuring compliance evaluated. 1. Introduction Accounting scandals at some of the big corporations like Enron, HealthSouth, Tyco and WorldCom had a devastating impact on investor confidence. Clearly...
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...employees. * research how regulatory agencies protect consumers, workers, and the environment. | INTRODUCTION | Review with students how to prepare unbound reports. Have a class discussion of the 4 components of social responsibility and ethics. Discuss how business people use values to make decisions that are acquired through family, educational, social and religious institutions. Discuss business code of ethics and how it serves as a guideline to help managers and other employees in any organization make better decisionsStudents will conduct on-line research of 5 major corporate websites in order to write a code of ethics for a fictitious company they will create. The students will then describe how these ethical guidelines relate to any or all of the four (4) components of social responsibility. Students will look at 2-3 companies that have practiced unethical behavior. The students will make a multi-media presentation to the class describing any relationship between their company’s code of ethics and the four components of social responsibility. | ESSENTIAL QUESTION | What is ethical behavior and social responsibility | INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP | * Entrepreneurship: students will be writing a code of ethics for a company they are creating. * Academics and Technology: Students will be using Microsoft office programs to prepare the code of ethics and presentations. They will also be using the internet for research. | STUDENT...
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...Homework: Term Paper GEB2430 Business Ethics & Social Responsibility Dr. Harvey Weiss June 16th, 2012 Abstract The main purpose of this research paper is to show how the Sarbanes-Oxley Act of 2002 may have contributed to holding corporate executives accountable for their actions then and for the future. This research paper will examine and discuss the origin of the Sarbanes-Oxley Act and go into detail regarding the eleven titles, or sections, of the document that it consists of. This research paper will then touch upon the different countries around the world that have been subsequently enacted with the Sarbanes-Oxley Act and conclude with the debates over the perceived benefits and costs from both opponents and proponents. The following research paper will prove to be useful for any executive running a public corporation. After reading this research paper, one will come to discover and understand the new standards implemented for corporate accountability as well as the new penalties for acts of wrongdoing. Body The Sarbanes–Oxley Act of 2002, also known as the “Public Company Accounting Reform and Investor Protection Act” by the Senate and “Corporate and Auditing Accountability and Responsibility Act” by the House of Representatives and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law passed on July 30, 2002, which set new or enhanced standards for all United States public company boards, management and public accounting firms. It...
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...Sarbanes-Oxley Act of 2002 SE584: Forensic and Business Investigations Techniques February 22, 2009 The passage of the Sarbanes-Oxley Act of 2002 (SOX) changed how accounting is practiced and how corporations handle their accounting departments, to include auditing and internal controls. Some of these changes are for better accountability and some are for governing the application of stricter rules. The accounting profession was dramatically affected by the events leading up to and after the passing of this law. In the days before SOX, there were many high valued fraudulent activities. The news was flooded with employees, managers, and executives who were committing fraud against their investors, their organizations, or both. Millions and billions of dollars were being lost. The acts that brought about SOX began many years before its inception but were especially prevalent during the dot-com boom. These company’s executives fraudulently reported increases in revenue dollars, bringing their net income up in order to keep pace with their growth projected by analysts. The collapse of these “fast and furious” companies did not mean the last of the major fraudulent activities by executives against organizations or their investors. The 1990s was a time that saw many changes affecting business. The Internet was beginning to open more to commercial use, no more was it just for academics and the government. The age of technology that had started in the 1960s truly took off. The...
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...Time Warner Cable 200 8 A N N U A L R E PO R T Time Warner Cable is the second-largest cable operator in the U.S. and a major provider of communications and entertainment services to homes and businesses. Our technologically advanced, well-clustered operations serve about 14.6 million customers in 28 states, with our largest operations located primarily in five geographic areas: New York State (including New York City), Texas, Ohio, the Carolinas and Southern California (including Los Angeles). Time Warner Cable is built on a foundation of technological innovation and commitment to the communities we call home. VIDEO • Time Warner Cable offers packages of ff cable channels to fit a wide variety of budgets. With Digital Cable, customers have access to more than 200 channels, On Demand, parental controls and optional DVR service. • Time Warner Cable’s Digital Cable is the “Home of Free HD.” Our highdefinition service delivers the best fi HD channels and HD On Demand. • On Demand gives customers thousands of viewing choices instantly, with new movies, shows and sporting events added every day—many in HD. • Start Over® is an Enhanced TV feature that lets viewers restart a program already in progress, at the push of a button, even if they haven’t programmed their DVR. HIGH-SPEED DATA • Road Runner High-Speed Online delivers a blazing-fast Internet connection with speeds up to three times faster than standard DSL packages. • Security Suite comes with every subscription and delivers...
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...Professional Development Plan by DBA Student A Project Presented in Partial Fulfillment of the Requirements for DDBA 8005 Foundations for Doctoral Business Administration Studies Instructor September 2009 Professional Development Plan Part IA: Description of Personal and Professional Goals From a very early age, I was encouraged to attend college by my parents, my grandparents, and a beloved uncle. They all taught me that obtaining an education, particularly a college education, was a privilege that had not always been afforded to people of color and that it should not be taken for granted. They also taught me that education was the best way to attain great success, no matter how I chose to define success. It did, however, take some time before I fully understood what they so passionately attempted to instill in me. It was not until I began working at Johnson C. Smith University (JCSU), in an environment of academia, that I understood the value and importance of education, and the incredible impact that being part of a learning environment has on a young mind. I have been fortunate to be able to utilize the management skills I learned from my undergraduate studies and through various employment opportunities after obtaining a master’s degree in business administration. I have enjoyed my experiences working in the business field, as diverse as they have been, and would love to teach business administration at the university level. I would like to pursue a Doctor...
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...Stack Ranking: Brilliant Management or Inherent Absurdity Ray Johnson MGMT E-4000 Organizational Behavior 1 August 2012 Abstract Employee stack ranking is a performance measurement system that requires every manager to rank its employees from excellent to poor. Stack ranking was popularized by Jack Welch at General Electric in the 1980’s. Since that time it has become a popular management technique. The use of stack ranking has many demonstrated successes, but many managers and business analysts are beginning to questions its value to an organization. In this paper I will examine from a critical perspective both the good and bad aspects of stack ranking in an attempt to determine its long term viability as an organization behavior. Stack Ranking: Brilliant Management or Inherent Absurdity Introduction Stack ranking, sometimes referred to as forced distribution, is a popular performance measurement (appraisal) tool. The concept behind stack ranking is to rank all employees within a given statistical set, all first line supervisors for example, from best to worst. In its most common iterations managers rank, or stack, workers into one of the three groups. The highest performing 20% (sometimes 10%) are ranked as top performers. This top tier group of employees is considered to be the future leaders of the company. They are rewarded with bonuses, raises, promotions stock options and other perks. The middle 70% of the group are considered to be “solid”...
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...9-110-045 REV: MARCH 31, 2011 EUGENE SOLTES A Letter from Prison On February 14, 2008, Stephen Richards, inmate #71320-053 at Taft Federal Correctional Institution, completed a letter to Eugene Soltes, a student at the University of Chicago Booth School of Business. Richards was the former global head of sales at Computer Associates. Exhibit 1 provides the list of questions Soltes asked Richards. Exhibit 2 is a copy of the letter Soltes received in return. ________________________________________________________________________________________________________________ Professor Eugene Soltes prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2009, 2010, 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. Purchased by: CHUAN LAN llaass2@163.com on August 24, 2013 110-045 A Letter from Prison Computer Associates and Stephen Richards Computer Associates International, Inc. (CA) began as a four-person start-up in 1976. Its founder, Charles Wang, sought to...
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...prior written consent of Cambridge Business Publishers, LLC, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Student Edition ISBN 978-1-61853-102-5 Bookstores & Faculty: to order this book, call 800-619-6473 or email customerservice@cambridgepub.com. Students: to order this book, please visit the book’s website and order directly online. Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1 About the Authors Peter D. Easton is an expert in accounting and valuation and holds the Notre Dame Alumni Chair in Accountancy in the Mendoza College of Business. P rofessor Easton’s expertise is widely recognized by the academic research community and by the legal community. Professor Easton frequently serves as a consultant on accounting and valuation issues in federal and state courts....
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...CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING Show Me the Earnings! The growth of new-economy business on the Internet has led to the development of new measures of performance. When Priceline.com splashed onto the dot-com scene, it touted steady growth in a measure called “unique offers by users” to explain its heady stock price. To draw investors to its stock, Drugstore.com focused on the number of “unique customers” at its website. After all, new businesses call for new performance measures, right? Not necessarily. In fact, these indicators failed to show any consistent relationship between profits and website visits. Eventually, as the graphs below show, the profits never materialized, and stock prices fell. The lesson here: Although the new economy may require some new measures, investors need to be careful not to forget the reliable traditional ones. PRICELINE.COM Net unique offers by users 3.0 million 2.0 1.0 0 I II III IV 1999 I II III IV 2000 DRUGSTORE.COM Unique customers 2.0 million 1.5 1.0 0.5 0 I II III IV 1999 I II III IV 2000 Stock price $120 a share 80 40 0 I II III IV 1999 I II III IV 2000 2000-IV close $2.13 Stock price $40 a share 30 20 10 0 I II III IV 1999 I II III IV 2000 2000-IV close $1.03 Source: Story and graphs adapted from Gretchen Morgenson, “How Did They Value Stocks? Count the Absurd Ways,” New York Times (March 18, 2001), section 3, p. 1. 34 Copyright ©2008 John Wiley & Sons, Inc. Preview of Chapter 2 ...
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