...Procurement process, mainly in water, roads and railway projects, in Italy is affected by corruption. ------------------------------------------------- CORRUPTION CHALLENGES Government and politics Checks and balances in the Italian government are compromised. A 2012 study indicates that the legislative branch has little independence from the executive. This creates a disparity in power and enables the executive to govern without appropriate accountability. Integrity mechanisms are also poor in the public sector. According to a 2011 report, parliamentary and government codes of conduct are aspirational at best, and not enforceable. Weak – and often non-existent – sanctions cannot effectively deter corrupt acts. National corruption scandals also undermine public officials’ image. Political financing Corporate donations to political parties and candidates are unregulated. Although there are constraints on election expenditure, there are no limits on donor contributions to parties or candidates. Donor identities are only revealed for contributions above €50,000 and even these loose regulations are not adequately enforced. Political party and campaign expenditure reporting are also unsatisfactory...
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...Examining a Business Failure - Tyco International Ltd Organizational behavior is defined as the study of the behavior of individuals, groups and structure and the impact to an organization. Organizational behavior uses the information gathered from this study to improve the organization’s effectiveness (Robbins, 2011). Organizational behavior focuses on a number of areas including the behavior of leaders, inter-personal communication, processes and structure within the organization, conflict and employee motivation. The behavioral disciplines of psychology, social psychology, sociology and anthropology form the basis for the study of organizational behavior. Psychology and social psychology studies the impact of conditions in the workplace and the impact to the employees’ performance. Within these sciences, learning theorists also studies the impact of change and how to reduce the challenges of change in the work environment [ (Robbins, 2011, p. 12) ]. According to the authors, sociology, and anthropology contributes to the study of organizational behavior by focusing on the relationship of employees as a group and the impact to the organizational structure. The culture and group dynamic of the employees will direct the level of motivation that in turn will negatively or positively impact the performance of the organization [ (Robbins, 2011, p. 12) ]. Psychology evaluates changes in individuals’ behavior and the impact to learning, Emotions, leadership, and decision-making...
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...Rite Aid Corporation, as the third largest drugstore chain (behind Walgreen and CVS) in the United States, operates more than 4600 drug stores in 31 states and the District of Columbia, and engages in selling prescription drugs (more than two-thirds of sales), health aids, cosmetics, beauty supplies, convenience foods and other merchandise. It is headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill, and has about 90,000 employees including pharmacists and part-time employees, as of March 3, 2012. (Marketline.com) Rite Aid Corp. also had a long history, which helps it become a mature company now. In 1958, a businessman named Alex Grass founded Rack Rite Distributors in Harrisburg, Pennsylvania to provide health and beauty aids and other sundries to grocery stores. In 1962, he had his first drugstore, called Thrif D Discount Center, in Scranton, Pennsylvania, which was an offshoot of Rack Rite Distributors. In 1965, pharmacy was added in its stores, and this chain was officially adopted its new name Rita Aid in 1968. At the same time, this company went to public and made its debut on the American Stock Exchange. After that, Rite Aid started to make many diverse acquisitions. For example, in the 1970s, it purchased nearly 300 stores, and by 1981 Rite Aid was the #3 drugstore chain, and sales exceeded $1 billion. During 1980s, approximately 900 stores were added in Rite Aid, due to acquisitions. On the other hand, the cost of expansion eroded Rite Aid's profit...
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...eroz Keller Graduate School of Business | Xerox Fraud Examination | Forensic Accounting and the Legal Environment Xerox is a leading business process and document management company headquartered in Norwalk Connecticut. Xerox employees 136,000 people worldwide and has annual sales of 22 billion dollars (Xerox, 2011). On April 11, 2002 the SEC filed charges against Xerox alleging that the company intentionally defrauded investors by accelerated the company's recognition of equipment revenue by over $3 billion and increased its pre-tax earnings by approximately $1.5 billion (Berger & Niemeier, 2002). Xerox settled the case by paying a 10 million dollar penalty, restating the financial statements for years 1997-2000, and to have a committee of outside directors review the company’s accounting controls and policies. The official complaint filed by the SEC highlights the problems that led to the senior management engaging in fraud to boost their financial figures. According to the SEC: “Companies that failed to meet Wall Street's earnings estimates by even a penny often were punished by significant declines in stock price. In addition, compensation of Xerox senior management depended significantly on their ability to meet increasing revenue and earnings targets (SECURITIES AND EXCHANGE COMMISSION V. XEROX CORPORATION, 2002).” The underlying problems that led to the accounting fraud was the compensation for senior management being tied to stock options and the stock...
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...REVIEW OF ACCOUNTING ETHICS: HEALTHSOUTH CORPORATION SCANDAL Dannie Lover Professor Seedgrass Financial Accounting South University October 9, 2013 THE ORGANIZATION In 2003, the Securities and Exchange Commission (SEC) charged HealthSouth Corporation, the nations’ largest provider of outpatient surgery, diagnostic and rehabilitative healthcare services, and its Chief Executive Officer and Chairman Richard M. Scrushy with a massive accounting fraud. Scrushy, along with several of his former colleagues allegedly inflated HealthSouth’s pre-tax earnings. [Knapp] Founded in 1984 in Birmingham, Alabama, with more than 50,000 employees and nearly 2000 facilities across all states, HealthSouth earned recognition as a top-five performer in the S&P 500 index. This thriving company grew rapidly and became publicly traded within two years of existence. The company is believed to have overstated its profits by at least 1.4 billion since 1999, in order to meet or exceed Wall Street earnings expectations and maintain market price for stock. [Press Release 2003] THE ALLEGIATION The allegation came just after an earnings restatement and insider-trading charge triggered the investigation, sending HealthSouth stock tumbling to a record low. [Romano 2003] Many attempts at whistle blowing were suppressed, when employees expressed concerns due to falsification of documents. One accountant in particular, was quickly silenced and moved to a dead end job outside of Accounting...
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...Module Code: FC512 Class/Group: Group E Module Title: Skills for Study for Foundation Business and Social Sciences Students Assessment: Final Essay Assignment Title: Describe and evaluate the benefits of zero-hours contracts to both employers and employees Tutor Name: Dan Spencer Student ID Number: 2229804 Date of Submission: Monday, October 19, 2015 Heather Stewart, an Observer's economics editor in the guardian stated,“Now we have at least 697,000 workers in the economy who don’t know how many hours they’re going to be working.” reference Zero hour contracts are flexible agreements between the employers and employees that do not include the employee’s number of working hours (OGL, 2015). This is considered a way to make fast and easy money. The employee only comes to work when called by the employer (Downie, 2013). Some zero hour contracts include holiday pay; however, they do not include sick leaves (CIPD, 2013). In the United Kingdom, about 697,000 people work on zero-hour contracts, which is 2.3% of the UK’s employment rate (BBC News, 2015). Many people from different careers are on zero hour contracts including low-paid jobs such as McDonalds’ employees as well as high-paid careers (Blanchard, 2015). Considering the advantages and disadvantages of zero hour contract on both the employer and employees, this essay argues that zero hour contracts should be banned. Some experts argue that zero hour contracts...
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...Chipotle's CSR: Mission or Marketing? Megan Rehkemper Webster Abstract Companies with CSR stated standards tend to make the headlines when their actual business practices are contrary to those standards. Chipotle, one of the fastest growing chain restaurants, is no stranger to this controversy. The company has made great strides in offering “Food with Integrity” yet it still lacks in credibility. This paper will analyze Chipotle’s CSR and how its standards have led many to question the company’s core values. Chipotle's CSR: Mission or Marketing? The heightened media attention on CSR is at least partially in response to society’s interest in socially conscious businesses. Consumers are willing to pay a premium price for environmentally-friendly brands. At the same time, there is much skepticism as to whether companies are intentionally or accidently misleading consumers. Chipotle, one of the fastest growing fast-casual restaurant chains in the world, declares it serves “Food with Integrity”. What does that mean? The company’s reputation has taken some hits in recent years due to lack of transparency. Lessons have been learned along the way yet there is still a credibility gap. Many wonder if Chipotle is telling the public a feel-good story or the truth. This paper will take a look at the company’s CSR: intent vs. execution vs. depiction. Genetically Modified Organisms GMO’s are plants or animals who have been inserted with a gene from an unrelated species...
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...ODIs, and away from home his average shrank to 26.70. Then last year, another name joined Anwar at the top of the list: Charles Coventry. Even after he scored 194 not out, a lot of people in a lot of cricketing discussions over lots of beers in lots of pubs, would still be asking: Charles who? The anomaly at the top of the record charts was begging to be corrected. I was waiting for this day since that fateful May night almost 13 years ago. I was not alone. There were thousands – millions probably – who felt that the name that belonged at the top of the table was that of Sachin Tendulkar. In what is proving to be a golden twilight of his career, Tendulkar has systematically gone about checking all the un-checked boxes in his cricketing CV. One important one was ticked when he led a mammoth fourth innings chase against England at the same ground that he had failed to complete the job against Pakistan in 1999. Another was accomplished on 24th Feb 2010, with the world’s highest ODI score and first ODI double-century. No other name seemed to have belonged so naturally at the top of the list than his. Until 23rd Feb 2010, Tendulkar had seemed like the logical successor to Viv Richards as the greatest ODI batsman of his generation. Not anymore. He is now undoubtedly, the greatest ODI batsman ever. He has made the great Viv seem like a mere prelude to the real thing. From the moment he came out to bat and stroked his first boundary to the moment when he raised his arms in triumph...
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...(LDDS), began operating as a long distance reseller in 1984. Early investor Bernard Ebbers was named CEO the following year. Through acquisitions and mergers, LDDS grew quickly over the next 15 years. The company changed its name to WorldCom, achieved a worldwide presence, acquired telecommunications giant MCI, and eventually expanded beyond long distance service to offer the whole range of telecommunications services. WorldCom became the second-largest long-distance telephone company in America, and the firm seemed poised to become one of the largest telecommunications corporations in the world. Instead, it became the largest bankruptcy filing in U.S. history at the time and another name on a long list of those disgraced by the accounting scandals of the early 21st century. ACCOUNTING FRAUD AND ITS CONSEQUENCES Unfortunately for thousands of employees and shareholders, WorldCom used questionable accounting practices and improperly recorded $3.8 billion in capital expenditures, which boosted cash flows and profit over all four quarters in 2001 as well as the first quarter of 2002. This disguised the firm’s actual net losses for the five quarters because capital expenditures can be deducted over a longer period of time, whereas expenses must be subtracted from revenue immediately. WorldCom also spread out expenses by reducing the book value of assets from acquired companies and simultaneously increasing the value of goodwill. The company also ignored or undervalued accounts...
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...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 law on July 30, 2002 by President Bush. It’s also known as the 'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate...
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...ISSUES IN ACCOUNTING EDUCATION Vol. 30, No. 1 2015 pp. 47–69 American Accounting Association DOI: 10.2308/iace-50948 Diamond Foods, Inc.: Anatomy and Motivations of Earnings Manipulation Mahendra R. Gujarathi ABSTRACT: Diamond Foods is America’s largest walnut processor specializing in processing, marketing, and distributing nuts and snack products. This real-world case presents financial reporting issues around the commodities cost shifting strategy used by Diamond’s management to falsify earnings. By delaying the recognition of a portion of the cost of walnuts acquired into later accounting periods, Diamond Foods materially underreported the cost of sales and overstated earnings in fiscal 2010 and 2011. The primary learning goal of the case is to help students understand the anatomy and motivations of earnings manipulation. Specifically, students will have the opportunity to (1) apply the FASB’s Conceptual Framework to a real-world context, (2) determine the nature of errors and compute their numerical effects on financial statements, (3) understand motivations for earnings management and actions needed for managing earnings of future years, (4) explain the anatomy of financial reporting fraud by reconstructing journal entries, (5) prepare comparative financial statements for retroactive restatements, (6) explain the rationale for clawback provisions in compensation contracts, and (7) understand the difference between the real and accrual-based earnings management. Keywords:...
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...conduct? Key Terms The following alphabetical list identifies the key terms discussed in this chapter. The page number for each key term is provided. |Accountability, 154 |Intellectual property, 164 | |Carpal tunnel syndrome (CTS), 176 |Liability, 154 | |Computer abuse, 173 |Non-obvious relationship awareness (NORA), 153 | |Computer crime, 173 |Opt-in, 161 | |Computer vision syndrome (CVS), 177 |Opt-out, 161 | |Cookie, 160 |P3P, 162 | |Copyright, 165 |Patent, 166 | |Descartes’ rule of change, 155 |Personal Information Protection and Electronic Documents Act...
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...conduct? Key Terms The following alphabetical list identifies the key terms discussed in this chapter. The page number for each key term is provided. |Accountability, 154 |Intellectual property, 164 | |Carpal tunnel syndrome (CTS), 176 |Liability, 154 | |Computer abuse, 173 |Non-obvious relationship awareness (NORA), 153 | |Computer crime, 173 |Opt-in, 161 | |Computer vision syndrome (CVS), 177 |Opt-out, 161 | |Cookie, 160 |P3P, 162 | |Copyright, 165 |Patent, 166 | |Descartes’ rule of change, 155 |Personal Information Protection and Electronic Documents Act...
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...conduct? Key Terms The following alphabetical list identifies the key terms discussed in this chapter. The page number for each key term is provided. |Accountability, 154 |Intellectual property, 164 | |Carpal tunnel syndrome (CTS), 176 |Liability, 154 | |Computer abuse, 173 |Non-obvious relationship awareness (NORA), 153 | |Computer crime, 173 |Opt-in, 161 | |Computer vision syndrome (CVS), 177 |Opt-out, 161 | |Cookie, 160 |P3P, 162 | |Copyright, 165 |Patent, 166 | |Descartes’ rule of change, 155 |Personal Information Protection and Electronic Documents Act...
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...Module 4 Analyzing and Interpreting Financial Statements QUESTIONS Q4-1. Return on investment measures profitability in relation to the amount of investment that has been made in the business. A company can always increase dollar profit by increasing the amount of investment (assuming it is a profitable investment). So, dollar profits are not necessarily a meaningful way to look at financial performance. Using return on investment in our analysis, whether as investors or business managers, requires us to focus not only on the income statement, but also on the balance sheet. Q4-2.B ROE is the sum of an operating return (RNOA) and a nonoperating return (the effective use of financial leverage – specifically, leverage multiplied by the spread). Increasing leverage increases ROE as long as the spread is positive. Financial leverage is also related to risk: the risk of potential bankruptcy and the risk of increased variability of profits. Companies must, therefore, balance the positive effects of financial leverage against their potential negative consequences. It is for this reason that we do not witness companies entirely financed with debt. Q4-3. Gross profit margins can decline because 1) the industry has become more competitive, and/or the firm’s products have lost their competitive advantage so that the company has had to reduce prices or is selling fewer units or 2) product costs have increased, or 3) the sales mix has changed from higher margin/slowly turning...
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