...BACHELOR OF COMMERCE YEAR 3 - ACADEMIC CALENDER | | | Appendix A: ASSIGNMENT COVER SHEET | | | | | | | | | | Date Received: ………………………….. | | | | Date Returned: ……………....………… | | | Programme | BACHELOR OF COMMERCE DEGREE | Module Name | BUSINESS MANAGEMENT 3 | Assignment Number | ASSIGNMENT 1 | Surname | De Villiers | First Name/s | Cornèl | Student Number | BCOM 1121041 | Date Submitted | | Postal Address | P O Box 252 | | Henties Bay | | Namibia | | 9000 | E-MAIL | | myregent email addresss | (Please note that confirmation of assignment receipt as well as | | return assignment will be forwarded to this e-mail address) | E-MAIL | renier@iway.na & Cornel.deVilliers@hbaymun.com.na | (alternate e-mail address) | | Contacte Numbers | Cell: 0812575079 | | Home: 064-500694 | | Work: 064-502022 | Alternate Contact: Name | Renier Henning de Villiers | Relationship | Husband | Contact Number | 0812403219 | | | I hereby confirm that the assignment submitted herein is my own original work. | | | | | Signature of Student: | ……………………………………………………………….Date: ……………………………….. | BUSINESS MANAGEMENT 3: ASSIGNMENT 1 Table of Content: Question: Page: Question 1 3-6 Question 2 7-9 Question 3 10-12 Question 4 13-14 Bibliography 15 QUESTION 1: (40) Read the...
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...Business Ethics: Enron Case Study Introduction: Enron was a very powerful company that was doing very well in the market. The value of its share was high and the company was enjoying an overall healthy position as a business. The employees were happy and new recruits would have killed to get a job at Enron. However, this was not to last. Enron enjoyed so much success that it got to its head and it started making all sorts of problems. Enron decided to change its organizational structure by employing new people at high posts who were given the opportunity to make big decisions that could directly affect the organization. Thus, their organizational design was altered. The reward system within the organization was also changed since the top performers were given the opportunity to receive many bonuses and stocks options. This new system was to be controlled by an internal controlling authority but this did not work well because the people who were reviewing and those who were being reviewed were working on the same levels and this caused them to form alliances among themselves. They all ‘looked out’ for each other and were not honest with their reviews, and everyone was given good reviews. Employees were scared to do something that would anger their superior and this is why they all became ‘yes men.’ This created a very unstable culture that was based on dishonesty and this caused Enron’s downfall. Division of Workers and Executives: The Culture at Enron Enron’s...
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...Effect of unethical article ACC 291 June 27, 2013 Julio Medina The unethical behavior of Enron Corporation The unethical habits and behavior's in accounting would be deceptive under financial analysis such as gainings, misuses of fundings, overstating the value of corporate assets or underreporting the existence of liabilities, overdoing revenue as well as understanding expenses. Another unethical systems would be securities fraud, manipulation of the financial markets and bribery. Enron is one of the greatest example that impact the unethical behavior. Enron corporation was an American energy company was formed from the merger of Houston Natural Gas including the inter north a Nebraska pipeline company. Enron employed around 21,000 people and was one of the worlds leading natural gas, pulp, electricity, and communications companies. Enron reported financial situations of were the company constant of institutionalized systematic planning accounting fraud having rumors of corruption to secure contracts in central America. Enron's ethics of coding was created on respect, integrity, communication, and excellence. These values were described as follows. Respect. We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here. Integrity. We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we...
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...through those illegal financial documents would go to an elite set of men and women, called forensic accountant. Forensic accountants help America recover huge amounts of financial dollars by bring corporate leaders to justice who made illegal business decisions (Davis, Farrell, & Ogilby, 2009). Attributes of the Elite Forensic accounting/accountant (FA) involves the application of accounting concepts and techniques to legal problems (Davis, Farrell, & Ogilby, 2009). “Initially, forensic accountants were used by government agencies, such as the CIA, the FBI and the IRS, to uncover and investigate fraud” (Ramaswamy, 2005, p. 2).With the recent economic downturn the profession of forensic accounting has seen a 200% increase since the Enron and...
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...ACCOUNTING TRANSPARENCY Charles Katoroogo Prof Brandy Havens ACC 303 12/1/2013 ACCOUNTING TRANSPARENCY Accounting is mainly concerned with general rules, concepts and principles that are established with the purpose of governing different fields of financial reporting. Accounting principles are also known as accounting principles and guidelines, these acts as the base on which more complex and critical rules are based. The authority responsible for issuing the accounting standards (i.e. financial accounting standard board) also uses these basic principles to formulate the accounting standards in a more efficient manner. Generally accepted accounting principles (GAAP) consist of various rules and principles which are used for preparing the financial statements. GAAP consist of three important fields:- 1) Basic accounting principles and guidelines. 2) Various accounting standards issued by FASB. 3) Generally accepted practices in the industry. All those companies which are providing its financial statement to public is required to follow the GAAP while preparing the financial statements. Further, if the company is a listed entity then the federal law of the nation requires the company to get its accounts audited by an independent certified public accountant. There has been various corporate scams in past years which has made it compulsory for the regulatory bodies to create various laws and amend the existing laws so that more accurate and transparent financial...
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...Enron Corporation was established in 1985 by Ken Lay after merging Houston Natural Gas and Internorth, it has more than 20,000 employees and it's one of the seven largest electricity, natural gas company. Before it went to bankruptcy, Enron claimed revenues of almost $101 billion in 2000, placed Enron at sixth on the Fortune Global 500, it also named "America's most innovative company" for the past six years(1996-2001). In 10/22/2001, The "street.com website pronounced a message revealed the complex financial transaction between Enron and Osprey Co., through Osprey, Enron debited 340 billion dollars"○1 which never appeared in the financial statement. At the same time, SEC began to investigate Enron, thus, the Enron's accounting scandal finally above the water. The first person who became the whistleblower disclosure Enron's financial fraud was Watkins and Cooper, although the CFO asked cooper to postpone her investigation, Cooper still doing her audit to alert the board about the financial statement problems, at the meantime, Watkins outlined the problems in a memo to Ken Lay, "but by the time Watkins and Cooper blew the whistle, much damage had already been done and the shareholders and employees were the ultimate losers."○2 Whistleblower program is very important to minimum a corporation's hazardous activities, but the blower often face some awkward situations, such as fear of the manager's retaliation, fear to be treat as a betrayer by the workmates, unwilling to be...
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...around, leave things off the books, and write checks to put money into their own hands. ENRON is a prime example of fraud being committed in a company. They not only caused the company to go bankrupt, but shareholders lost $74 billion, employees lost their jobs and retirement accounts were lost as well. ENRON is energy, commodities and service corporation based out of Houston, Texas. They committed many fraudulent crimes in which one was practically given to them by the government. Most organizations are regulated by the government. Financial regulation is a type of regulation or supervision that holds an organization to certain requirements, restrictions and guidelines which is aimed at maintaining the integrity of the financial system. Its’ objectives are to keep market confidence, financial stability, consumer protection and reduce financial crimes and unethical behavior. However, ENRON filed for deregulation, in which when it was granted, the executives were able to hide and not divulge certain items such as losses, which had investors wanting to invest in that company since it looked to be so profitable. However, this lead to a bigger scandal in which finance.laws.com/enron-scandal-summary says, “By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those...
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...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). 2.1 The Scandal of Enron The scandal of Enron in 1990’s is well known in history. When due to misrepresentation in the accounting procedures the...
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...Enron Scandal: Who did what? What went down between Fastow, Lay, Skilling, and Causey? Dillon Benjamin Lock Haven University Enron operated one of the largest natural gas transmission networks in North America, totaling over 36,000 miles (Frontain, 2002 p. 1). The company was formed in 1985 when InterNorth purchased Houston Natural Gas (McLeon, 2013, p. 1). According to Frontain (2002), “Enron managed the world’s largest portfolio of natural gas risk management contracts and pioneered innovative trading products” (p. 1). By the year of 2000 Enron was the 7th largest corporation in the United States” (McLeon, 2013, p. 1). That is who and what Enron was before everything came crashing down. Enron employed sketchy and misleading accounting practices to hide its financial losses (McLeon, 2013, p. 1). Under Jeffrey Skilling the trading operation adopted market-to-market accounting in which the present value of anticipated revenue is realized and the expected costs of fulfilling the contract are expensed once a contract is signed (Frontain, 2002, p. 2). Enron got into trouble in 2001 when Arthur Anderson, Enron’s outside auditor, correctly accounted one partnership deal that created severe quarterly losses (Frontain, 2002, p. 2). According McLeon (2013), “Those losses and subsequent profit and debt restatements caused Enron's stock price to drop, triggering the unraveling of the partnership and resulting in a sudden and dramatic financial collapse. This event led them into...
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...The Impact of the Sarbanes-Oxley Act on Auditing Prior to the 2002, there were numerous accounting and corporate scandals that rocked the business world. Foremost of which is the Enron debacle which was followed by WorldCom, Tyco International and Global Crossing (CIO Decisions). The collapse of these businesses was attributed to the lack of regulatory controls in the part of the government as well as transparency of operations of corporations which can be of help to its stakeholders in the analysis of profitability and assurance of good governance to the public. They importance of the Act lies on the accountability and security of financial reporting that the stakeholders would have in a corporation’s implementation of good business practices and adherence to laws and regulations in the administration and operations of the company. The Sarbanes-Oxley Act revised a significant portion of the federation securities laws which had been in place for 60 years already (Sarbanes-Oxley Information). Before SOX, there is a self-regulation in the accounting profession whereby the Securities and Exchange Commission was “given statutory authority to set accounting standards and oversight over the Activities of the auditors…the role of establishing standards was left to the accounting profession” (CPCAF). One of the key changes in internal audits is that the “Act requires all financial reports to include an internal control report” (Sarbanes...
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...Introduction Authored in the wake of the Enron and WorldCom scandal, The Sarbanes-Oxley Act was enacted in 2002, to keep public entities from committing fraudulent financial practices. The name Sarbanes-Oxley derives from former Senator Paul Sarbanes and former Representative Michael Oxley. “The Sarbanes-Oxley Act (SOX) was signed into law by President Bush on July 30, 2002, and created a new private sector, nonprofit corporation-the Public Company Accounting Oversight Board (PCAOB)-to oversee the financial reporting of public companies. Among other changes, SOX's sweeping reforms required that a company strengthen auditor independence; have its chief executives sign off on the financial statements; obtain an opinion about its internal control systems; and have an internal audit function that is examined by external auditors” (Grumet, 2007). Part A Audit Committees The Sarbanes-Oxley Act affects audit committees of public company boards of directors. The committee of the board of directors is directly responsible for the public company financial statements, in addition to the appointment, compensation, and oversight of the work of any registered public accounting firm employed by that issuer. In the case of misunderstanding between management team and the auditor’s regarding financial reporting, it is the audit committee’s responsibility to get everyone involved on the same page. In addition, the audit committees need to monitor all financial information communicated...
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...The Sarbanes-Oxley Act (SOX) was the result of innumerable corporate scandals such as Enron, WorldCom and Tyco. These companies were misrepresenting their financial reporting to investors and stakeholders to make themselves look more financially stable when in reality they were not. This misrepresentation resulted in huge financial losses and the mistrust of investors in the market. In order to better control financial reporting and restore investors trust, the SOX act was passed. Sarbanes-Oxley aims to enhance corporate governance and strengthen corporate accountability. It does that by: • formalizing and strengthening internal checks and balances within corporations • instituting various new levels of control and sign-off designed to • ensure that financial reporting exercises full disclosure • Corporate governance is transacted with full transparency. (Sarbanes-Oxley Essential Information) The Sarbanes-Oxley Act implemented new standards for financial reporting accountability in a way that CEOS could not pass on the blame to others. They cannot hide behind the “I was not aware of the company’s financial issues “reason anymore. Executives are now held responsible for any financial misrepresentation in their companies’ reporting. They are also held accountable for the design and implementation of new internal control to validate their financial records. Thus, they are responsible of making sure that an internal control report as well as an internal control assessment...
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...The Enron and Corporate Governance Company Enron Corporation Industry Energy Founded Omaha, Nebraska, USA (1985) Founder Kenneth Lay Employees approx. 22,000 (2000) Fate Bankruptcy, 2001 Website enron.com To write about Enron I was inspired by documentary movie “Enron: The Smartest Guys in The Room”. It explains in details how negligence and ‘cheating’ in corporate governance can lead to disaster for whole nation. The case of Enron became classical example of the company where executives can manipulate whole industry using ‘creative accounting’ and corporate governance. Enron bankruptcy is the greatest knowing corporate failure in the US from the time when the crash of numerous savings and loan institutions in the 1980s. This scandal showed the necessity for important improvements in accounting and corporate governance in the country, along with a tight control at the moral values in the culture of business in whole and of enterprises in the country. Actually, one can find a lot of reasons why this collapse happened. And there is the problem of interest between the two roles played by Mr Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. In some ways, the culture of Enron was the primary cause of the collapse...
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...In theorld of financial accounting Sarbanes and Oxley or SOX is one of the most important pieces of legislation passed in this decade or even in the history of financial accounting. Sarbanes and Oxley brought about major changes in financial accounting which allows for more regulation of the accounting profession. It took Accounting form being looked at as a numbers game and placed more importance on the communication aspect of the profession. This essay will focus on Sarbanes and Oxley and its impact on the accounting profession as a whole. How can one piece of legislation weigh so heavily on a profession? To answer that question one has to look at the impact Sarbanes and Oxley has had on the practice of public accounting. Prior to Sarbanes and Oxley the regulation of public accounting was done internally, through organizations such as the SEC. However with the passage of Sarbanes and Oxley the profession was given an overhaul making companies more accountable. Sarbanes-Oxley was established to improve the quality and transparency of the financial statements issued by public companies. With that purpose in mind Sarbanes-Oxley developed a new board to oversee how financial statements are audited according to independent standards, the Public Company Accounting Oversight Board. This changed the game. It decreased the chance of companies falsifying financial statements, mainly because of the threat of penalties and imprisonment. In addition Sarbanes and Oxley have had a cascade...
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...a)The purpose and use of the different accounting records which can be used in MonteHodge: Accounting is a crucial discipline for keeping track of quantifiable factors for a business or individual. Accountants are primarily employed to track the flow of money through an organization. In some cases, they are charged with ensuring legal compliance. In others, they are more specialized in optimizing that cash flow. Accountants also organize and aggregate financial information and produce reports for people less experienced in the discipline. (Source: Purpose of Accounting | eHow.comhttp://www.ehow.com/about_4679149_purpose-accounting_.html#ixzz22YwT2kpu ) The accounting system for your business consists of several types of records. Although there are many types of underlying financial records, such as invoices, journals, and receipts, the major accounting records are types of financial statements that summate the financial status of a business. Each type of accounting record details certain information about your business, and each is used for a different purpose, but each type is also linked to another record in your set of financial statements. Although modern accounting software creates these statements automatically based on transactions you enter, it’s still important to understand how each type of accounting record is used. Income Statement The income statement lists all your business income and expense transactions. It is also known as a profit and loss statement...
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