...Fax – 555.123.7654 msilkman@violetsilkindustries.net Violet Silk Industries’ CFO Has Departed Amid SEC Investigation Marietta, CA December 10, 2012 – For unknown reasons, CFO John Doe, Jr. suddenly departed from Violet Silk Industries (VSI) yesterday. Prior to his departure, a SEC investigation was launched to determine if the accounting practices surrounding revenue recognition of VSI were faulty. VSI is cooperating with the investigation and has hired an external audit team to analyze GAAP revenue recognition compliance. VSI’s controller, Bluie Redman will serve as interim CFO, effective immediately, while the board of directors selects a new CFO. VSI reports that it is not currently aware of any wrongdoing, but will provide more information as it becomes known. About Violet Silk Industries: Violet Silk Industries is a publicly traded company that imports and exports silk fabric to and from third world countries. The company started in 2002 as a roadside silk fabric vendor and within three years expanded to its headquarters in California and four import/export plants. For further information, contact Mark Silkman at 555-123-4568. ### MEMORANDUM To: Mr. Yung-Guy, Manager From: your name, CPA Subject: PR Communications about CFO departure Date: December 10, 2012 CC: your facilitator_____________________________________________________________ This memo will outline what forms and communications Violet Silk Industries is legally required to file and compose...
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...OAK INDUSTRIES, INC. Oak Industries began operations in the early 1935 as a manufacturer of car radio components. The California-based company struggled financially through its first few years but managed to emerge from the Depression, like many of its competitors. In the late 1965, Oak expanded into the cable television industry. Technological innovations developed by the company contributed to the tremendous growth of that industry during the past few decades. lo 1977, Oak began marketing subscription television services. Within four years, Oak ranked as the largest operator of subscription television systems in the United States. Oak’s subscription television subsidiary also generated the majority -of the company's annual revenues by the early 19805. RAINY DAY RESERVES _ Exhibit 1 presents selected financial data for Oak Industries for the period 1978-1981. Oak established new sales and profit records each successive year during this period. In fact, in both 1980 and 1981 the company’s actual net income eclipsed the figure reported by the company. In 1980, Oaks top executives became concerned that the company could not indefinitely sustain its impressive growth rate in annual profits. To help the company maintain this trend, the executives began creating reserves that could be used to boost reported profits in later years. To report a smooth upward earnings trend and to provide a "cushion" of profits to be used in periods of lower actual earnings, Oak implemented a...
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...1. P. Kemezis and W Clasgall, 'ATexas Wildcatter Cashes in on French Oil," Busrhess W-eek,'tsllay' ' 1985, 106-10i. 2. The dominant companies in the oil and gas industry include such firms as ExxonMobil and ConocoPhillips. These firms are often referred to as the "majors' or simply as "Big Oil." 207 208 !': $1 iil {r i. $- :..1 sEcTtoNTHREE INTERNALCournollssuas of oil and gas exploration by employing a rough-andtumble business strategy. Lee recognized that the large domestic oil firms in the U.S. had already identified the prime drilling sites in this country. So, Lee decided that Triton should focus its exploration efforts in other oil-producing countries, particularly in regions of those countries largely overlooked by "Big Oil." During Lee's tenure with Triton, the company launched exploration ventures in Argentina, Australia, Canada, Colombia, France, Indonesia, Malaysia, New Zealand, and Thailand. In the early 1970s, Triton discovered a large oil and gas field in the Gulf of Thailand. Recurring disagreements and confrontations with the Thai government stymied Triton from developing that field for more than l0 years. Lee's experience with the Thai government taught him an important lesson: If Triton's exploration ventures *.re io be successful in foreign countries, the company had to foster good relationships with key governmental officials in those countries. Lee created Triton Indonesia, Inc., a wholly owned subsidiary...
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...Tax Court & Board of Tax Appeals Memorandum Decisions Jose A. Alvarez, et ux. v. Commissioner, TC Memo 1995-414 , Code Sec(s) 6501. JOSE A. ALVAREZ AND WANDA ALVAREZ. Case Information: Code Sec(s): 6501 Docket: Dkt. No. 2849-91. Date Issued: 8/24/1995. Judge: Opinion by Laro, J. Tax Year(s): Years 1982, 1983, 1984, 1985, 1986, 1987, 1989. Disposition: Decision for Commissioner. Related Proceedings at Jose A. Alvarez v. Commissioner, [S| T.C. Memo. 1995-414 [1995 RIATC Memo U95,414], Tax Ct. Dkt. No. 22719-93 Cites: TC Memo 1995-414, RIATC Memo P 95414, 70 CCH TCM 518. Petitioners resided in Bayville, New Jersey, when they petitioned the Court in docket No. 2849-91. Mr. Alvarez resided in Coral Gables, Florida, when he petitioned the Court in docket No. 22719-93. For each of their [Mr. and Mrs. Alvarez] 1982 through 1984 taxable years, petitioners timely filed a Form 1040, U.S. Individual Income Tax Return, using the status of "Married filing joint return". For each of his 1985 through 1987 and 1989 taxable years, Mr. Alvarez untimely filed a Form 1040 using the status of "Married filing separate return". Drug-Dealing Activities Involving Mr. Alvarez Mr. Alvarez was the subject of a criminal investigation conducted by a multiagency task force (Task Force). The Task Force's investigation culminated on October 3, 1985, with the arrest of Mr. Alvarez, Adolph V. Carbone, and approximately 66 other suspects. Mr. Alvarez was charged with conspiracy to distribute cocaine...
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...interoffice memorandum to: Tyson Gay, MAnager from: Chandler Blakely subject: current sec investigation date: [ 8/6/2012 ] cc: Mark Durand, facilatator Current SEC Investigation This memo has been written in order for the company to discuss the current U.S. Securities and Exchange Commission’s (SEC) investigation into University of Phoenix Accounting Firm accounting practices. It is highly important that during this investigation that the company know everything it is required to do from a legal aspect as well as know the best route to take in dealing with the public opinion of such an investigation. The company must also prepare to deal with arising issues that may occur with external stakeholders while keeping our reputation as a top accounting firm. From a legal aspect the law and the SEC requires that we take certain action ensure fair trading amongst the public, these requirements include but are not limited to the following: * Any information that may affect or stock market price be released immediately * Any information reported is accurate and will not mislead investors * Any information will be widely disseminated We should be fast and efficient in all these necessary actions to prevent legal ramifications. Also the company has to show the public we or fully cooperative with the ongoing investigation and we have nothing to hide. Public communication in this situation is vital to our company. We have to communicate a genuine belief in what...
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...L V/J_ X \ Checkpoint Contents Federal Library Federal Source Materials Federal Tax Decisions Tax Court Memorandum Decisions Tax Court & Board of Tax Appeals Memorandum Decisions (Prior Years) 1995 TC Memo 1995-448 - TC Memo 1995-409 Jose A. Alvarez, et ux., TC Memo 1995-414, Code Sec(s). 6013; 6501; 6651; 6653; 6661; 6662, 8/24/1995 Tax Court & Board of Tax Appeals Memorandum Decisions Jose A. Alvarez, et ux. v. Commissioner, TC Memo 1995-414 , Code Sec(s) 6501. JOSE A. ALVAREZ AND WANDA ALVAREZ. Case Information: Code Sec(s): | 6501 | Docket: | Dkt. No. 2849-91. | Date Issued: | 8/24/1995. | Judge: | Opinion by Laro, J. | Tax Year(s): | Years 1982, 1983, 1984, 1985, 1986, 1987, 1989. | Disposition: | Decision for Commissioner. | | Related Proceedings at Jose A. Alvarez v. Commissioner, [S| T.C. Memo. 1995-414 [1995 RIATC Memo U95,414], Tax Ct. Dkt. No. 22719-93 | Cites: | TC Memo 1995-414, RIATC Memo P 95414, 70 CCH TCM 518. | HEADNOTE 1. Tax Court — arbitrary deficiency notice. Deficiency notice wasn't arbitrary, so burden of proof didn't shift to IRS: IRS'sYiet worth calcuJatfonssrnatched taxpayefs^net^Korth Iedger>d€f1ciertoes in taxpayer husband's income computed under^ank-deposifSsQTettiecrwere prima facieVaTld; and taxpayers kept inadequate records and stip&taled the accuracy of IRS's tracing of ledger entries to specific bank account balances. Husband's testimony that source of unreported income was a gift was unsupported...
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...PRESS RELEASE DILLON Luxury Doggie Corporation – CFO Resigns DILLON Luxury Doggie Corporation, America’s first traded luxury dog accessory chain announced Ms. April Buggers has resigned from her position as the Chief Financial Officer. The announcement comes on the heels of an ongoing investigation by the U.S. Securities and Exchange Commission (SEC) of the DILLON Luxury Doggie Corporation’s accounting practices used by the company concerning revenue recognition. DILLON Luxury Doggie Corporation has provided the SEC all requested documents and policies. We are fully committed to cooperating with the SEC to put any concerns to rest for the well being of the business, our employees, and stakeholders. For the interim the company has appointed Mr. Grumps Parker to serve as the chief financial officer until further notice. Mr. Parker has been with the company for the past 3 years and has made valuable contributions to the company. Mr. Parker bring hope to strengthen the company financial situation and department. MEMO To: DILLON Luxury Doggie Corporation Staff and Employees Date: May 13, 2013 SUBJECT: Chief Financial Officer Resigns The following announcement will be released to the public in a press release scheduled for Tuesday, May 14, 1013 at 10:00 a.m. EST. As a valued employee, staff member, and stakeholder in DILLON Luxury Doggie Corporation we encourage you to call-in and listen to the press release and questions from the media in attendance...
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...Whistleblowing and Sarbanes-Oxley Lulu Rodriguez-King LEG 500 – Law, Ethics, and Corporate Governance Strayer University Prof. Karina Arzumanova January 25, 2015 Whistleblowing and Sarbanes-Oxley A whistleblower is a person who exposes misconduct, alleged dishonest or illegal activity occurring in an organization. Whistle blowing empowers workers to speak up for principles and ethics and shine a light on unethical practices that can cause negative consequences for consumers, citizens and colleagues. Internal whistle blowing can be very valuable for an organization; reports of misconduct, given early and taken seriously, can avert disaster. Alternately, public whistle blowing has toppled and shamed many organization. Research finds that employees who are female, employees who are more satisfied with their jobs, and employees with longer tenure are somewhat more likely to say that they have reported observed misconduct. A supportive climate for whistle blowing is associated with both intentions to report and actual reporting behavior. Many internal whistleblowers fear retaliation from within their organizations for whistleblowing. Retaliation deters future whistleblowers; therefore, organizations need to design systems to both protect reporters and punish retaliators (Trevino). Recent Example of Whistleblowing While working as Director of Technical Accounting Research and Training in the Finance and Accounting department at Halliburton...
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...The Sarbanes-Oxley Act of 2002 and Its Effect on the Accounting Profession Robin M. Holdgate BA-507 Advanced Business Law and Ethics Upper Iowa University Richard Healy, A.B., J.D. October 14, 2012 Abstract Sarbanes-Oxley Act of 2002 was hailed as “the most far-reaching reforms since the time of Franklin D. Roosevelt” by President George W. Bush when he signed it into law. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the law. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco, WorldCom and Arthur Andersen LLP. These scandals cost investors billions of dollars when the share prices of affected companies collapsed and shook public confidence in the nation's securities markets. The Sarbanes-Oxley Act of 2002 and Its Effect on the Accounting Profession Enron, World Com and Arthur Andersen LLP, three names that have long become synonymous with deceptive accounting practices and lack of transparency, were but a few of the catalysts to the hastily enactment of the Sarbanes-Oxley Act of 2002. More commonly known as SOX, it was enacted on July 29, 2002 and signed into...
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...discussing the reasons. ABC Technologies has received notification that the U.S. Securities and Exchange Commission (SEC) are investigating ABC Technologies’ company’s accounting practices and, from the documents they have requested, the issue seems to concern revenue recognition. Companywide and Industry wide rumors are circulating suggesting inappropriate behavior by ABC Technologies. ABC Technologies is a publicly traded company and, as such, my company is required to issue a public notice concerning the sudden vacancy of the CFO. As the staff CPA on the finance team drafting the notice, it is critical to properly communicate the current situation to the general public. • Item #1: a press release. • Item #2: an internal memo o Legal Requirements. o Public Communication Value. o Balance of calming stakeholders and ethical reporting to SEC. In conclusion, brief explanations of public perception from the press release. Resignation & Investigation Monday, December 16, 2011, Mark Chief, CEO of ABC Technologies enters my office and closes the door. It turns out that ABC Technologies is under investigation for inappropriate accounting practices, and unfortunately the CFO, John P Notepad, left without notice. ABC Technologies is in a damage control position, and needs to act fast. Below is an immediate press release to the public, and internal memo outlining the next steps in the preservation of ABC Technologies. Immediate Press Release ____________________________________________________________ ...
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...SUBJECT: PR Communications Memo The purpose of this memo is to provide information regarding the recent press release. Jason Castro resigned as the Chief Financial Officer (CFO) of Winter Industries without providing a reason for his resignation. The resignation is effective immediately. Lily Smith was appointed by the Board of Directors as the interim CFO until the Board appoints a permanent CFO. Smith has been a part of Winter Industries for 20 years overseeing the Operations management department. While serving as interim CFO, Smith will retain her responsibilities of overseeing business operations and production here at Winter Industries. Winter Industries is a publicly traded company and is required to issue a public notice announcing this sudden vacancy. We are obligated to inform our stakeholders and customers of any changes that occur within our company. The historical financial records prepared by Castro were reviewed and questions arose regarding the handling of our company's finances. Currently, the U.S Securities and Exchange Commission (SEC) is investigating the accounting practices of Winter Industries. Legally, our company is required to comply with the SEC and provide all information requested with regards to this investigation. Public communication is important when it comes to situations of this sort. Communicating to the public early on is key too. "From a public relations standpoint, it may often make sense to go public early on, especially if...
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...Communications Memo Legal Obligations Amid the turmoil of a sudden resignation and rumors of inappropriate accounting practices, we cannot forget our legal obligations. The Securities and Exchange Commission(SEC) is investigating our situation and requesting documentation. The specifics of these requests lead us to believe that the questionable practices may involve revenue recognition. The SEC requires that we file the following information because we are a publicly held company (U.S. Securities and Exchange Commision, 2012) . • Our directors, officers, and particular shareholders o Salaries o Benefits o Any transactions between the company and the people listed above • Our operations • Financial condition of the business o Independently audited financial statements • Our position o Terms of contracts or lease agreements Value of Public Communication Public opinion is extremely important. The public needs to see active participation by the entire company in repairing this situation. We should strive for professionalism, humility, and honesty. The quick resignation of the CFO combined with this SEC investigation will cause the public and our stockholders to doubt our company’s honesty. The goodwill we have worked so hard to gain will be gone if we do not act fast. In an attempt to regain public trust, we need to be as transparent as possible. Transparency will require that we inform the public of our actions. To accomplish this we should consider adopting a...
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...Ethics Case: Arthur Andersen’s Troubles Once the largest professional services firm in the world, and arguably the most respected, Arthur Andersen LLP (AA) has disappeared. The Big 5 accounting firms are now the Big 4. Why did this happen? How did it happen? What are the lessons to be learned? Arthur Andersen, a twenty-eight-year-old Northwestern University accounting professor, co-founded the firm in 1913. Tales of his integrity are legendary, and the culture of the firm was very much in his image. For example, “Just months after [Andersen] set up shop in Chicago, the president of a local railroad insisted that he approve a transaction that would have inflated earnings. Andersen told the executive there was “not enough money in the City of Chicago” to make him do it.”1 In 1954, consulting services began with the installation of the first mainframe computer at General Electric to automate its payroll systems. By 1978, AA became the largest professional services firm in the world with revenues of $546 million, and by 1984 consulting brought in more profit than auditing. In 1989, the consulting operation, wanting more control and a larger share of profit, became a separate part of a Swiss partnership from the audit operation. In 2000, following an arbitrator’s ruling that a break fee of $1 billion be paid, Andersen Consulting split completely and changed its name to Accenture. AA, the audit practice, continued to offer a limited set of related services, such as tax advice.2 Changing...
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...the company's books for Arthur Andersen, the big accounting firm, received an extraordinary instruction from one of the company's lawyers. Congressional investigators tell Time that the Oct. 12 memo directed workers to destroy all audit material, except for the most basic "work papers." And that's what they did, over a period of several weeks. As a result, FBI investigators, congressional probers and workers suing the company for lost retirement savings will be denied thousands of e-mails and other electronic and paper files that could have helped illuminate the actions and motivations of Enron executives involved in what now is the biggest bankruptcy in U.S. history. Supervisors at Arthur Andersen repeatedly reminded their employees of the document-destruction memo in the weeks leading up to the first Security and Exchange Commission subpoenas that were issued on Nov. 8. And the firm declines to rule out the possibility that some destruction continued even after that date. Its workers had destroyed "a significant but undetermined number" of documents related to Enron, the accounting firm acknowledged in a terse public statement last Thursday. But it did not reveal that the destruction orders came in the Oct. 12 memo. Sources close to Arthur Andersen confirm the basic contents of the memo, but spokesman David Tabolt said it would be "inappropriate" to discuss it until the company completes its own review of the explosive issue. Though there are no firm rules on how long accounting...
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...MVE220 Financial Risk The Madoff Fraud Shahin Zarrabi – 9111194354 Lennart Lundberg – 9106102115 Abstract: A short explanation of the Ponzi scheme carried out by Bernard Madoff, the explanation to how it could go on for such a long period of time and an investigation on how it could be prevented in the future. The report were written jointly by the group members and the analysis was made from discussion within the group 1. Introduction Since the ascent of money, different techniques have been developed and carried out to fool people of their assets. These methods have evolved together with advances in technology, and some have proved to be more efficient than other. One of the largest of these schemes ever carried out occurred in modern times in the United States, it was uncovered as recently as in late 2008. The man behind it managed to keep the scheme running for over 15 years in one of most monitored economic systems in the world. The man in charge of the operation, Bernard L. Madoff, got arrested for his scheme and pled guilty to the embezzling of billions of US dollars. It struck many as unimaginable how such a fraud could occur in an environment so carefully controlled by regulations and...
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