(INTRO) One of key accounting activities this WorldCom case points out is how WorldCom capitalized leased lines which brought little or no value to the organization, but were accounted as capitalized assets, and the impact this can have on external users. “To maintain and broaden public confidence, members should perform all responsibilities with highest sense of integrity.” (AICPA.com) By capitalizing the costs of these leased lines instead of it would have shown a significantly lower net value of the company. It would have negatively affected cash flows and all the ratios. This activity certainly discredits the profession. It does not offer the fullest disclosure, objectivity, and transparency.
What should the court decide? Why? > Background check is very important before hiring an employee because it presents the potential liability of employers for the harmful acts of the people they hire. Employers are generally responsible for the actions of their agents so they should avoid negligent hiring. If an employer fails to meet its duty to conduct an adequate background check and hires an unfit employee who uses his or her position to inflict harm on others, that employer may be liable for negligent hiring.
• Though there was a Robust ERP system, the system failed due to major inconsistency of important information across different parts of the corporation. This made it difficult for executives to monitor and compare performance. • Even with Data warehouse initiatives, there were issues of the technical expertise required to extract meaningful data from the warehouse and data useful for predicting the future. • SYSCO’s competitive advantage was dependent of the decision of Twila Day to implement the BI Software, which would give SYSCO an advantage over its competitors. Initiative Objectives/Benefits No Objectives Benefits 1. Business Intelligence Software gave users access to data that was relevant to them • Avoid the need for employees to write complicated database queries or engage in programming tasks.
Furthermore, there were other, more contractually damaging findings that produced questions as to whether these certain distributors were conducting themselves as honest representatives of Handy Andy, Inc. It is completely apparent that all issues found within the study that Mr. Ortega conducted captured a systemic and calculated customer service problem. Exploiting Distributors? When looking at the many different ways that Handy Andy, Inc. and its licensed retailers were exploited, we find that information was selective and guarded. Customers in the areas of concern were under the impression that they had to contact the factory directly rather than the actual retailers or even Handy Andy, Inc. Exploiting Distributors?
Nichole McCoy – ISAS610 – 9041 Risk Management How does a risk management team work to identify and mitigate risk within a company? University of Maryland University College Graduate School of Management and Technology In the article, “Embrace the Risks,” by Charles Babcock, he discusses how risk is an everyday part of doing business, and must be accurately accessed to stay competitive. Of course, it’s impossible to eliminate risk all together, especially in the insurance or financial services industry. He explains that there is a tendency for companies to try to eliminate the risk, and in doing so, they overspend. For this reason, the only solution is to have a good risk management plan in place that focuses on the larger threats.
Enron is a prime example of how the temptation of greed and the actions of irresponsible behavior can grow and spread like an infection from a corporate boardroom. “In this case, the infection spread to the energy firm’s accountant’s at Arthur Anderson, who looked the other way and later tampered with evidence.” (Stancavage, 2010). All those involved at Enron should have had a complete understanding of ethics, which in this case was classified as an avoidance of questionable or criminal acts. But it can be about excellent customer service or asking “what does an excellent boss-employee relationship look like?” (Stancavage, 2010). It had been determined that there are, in fact, companies out there on U.S. soil that actually understand and accept the concept of ethical behavior within an organization.
He believes looking through employees and children’s computers is a complete transgression of their privacy, and it’s not right. McFadden also believes, just because the employer or parent is snooping through the employee or child’s computer, doesn’t mean that he or she will stop the bad behavior. While I somewhat agree with McFadden’s beliefs about ones privacy, looking through an employees’ or child’s computer is completely necessary in regards to ethics and protection. Employee monitoring within the workplace, is an effective way for the company to find its unsatisfactory employees. According to McFadden, “a whole market of programs has emerged that allows companies to secretly record everything a person does with his or her computer.” In the past and present, employees believe that it’s acceptable to use their company’s computers to look at porn, participate in social networking, and send instant messages to friends.
Materiality is defined by the FASB as an omission that would affect a normal person by a misstatement such as using earnings management to skew the true earnings or revenue. This calls in to play the unethical behavior that earnings management places on the public (violating AICPA Code of Professional Ethics). SOX further required management and accountants to be cognizant of the material errors that financial misstatement and false reporting could have from an ethical standpoint. It holds them accountable for all financial reporting from their company. This includes criminally and financial accountability.
The main argument of the paper, “Why Good Accountants Do Bad Audits”, is that the provisions of the Sarbanes-Oxley Act (SOX) of 2002 are not sufficient in fixing the problems with the U.S. system of auditing. While SOX aims at eliminating conscious corruption, the authors attribute the problem to unconscious bias, the idea that auditors unknowingly discount facts that contradict the conclusions that would benefit them and embrace evidence that supports their positions. The paper discusses three structural aspects of accounting and three aspects of human nature that create opportunities for bias. Each of these aspects influences the judgments auditors make and can lead even the most honest auditors to unintentionally distort the numbers in ways that mask the company’s true financial position. With these aspects in mind, the authors offer recommendations that would limit the effects of biases including full divestiture of consulting and tax services, prohibit auditors from taking positions with the firms they audit, removing the threat of being fired, and educate auditors so they understand how and why biases effect their decisions.
The Third Coast Auto Group, LP may have been unintentional but took careless actions that became their responsibility. Third Coast Auto Group also known as TCAG was negligent in keeping their guard dog restrained while work hours putting his employees, and customers and nay other individual at actual harm. In the tort of negligence there are three possible things that need to be proven in order to succeed. VanHouten has to prove that the defendant owed a duty of care, secondly that the defendant breaks that duty of care within the standard of care required by law, and finally breach of duty of care results in damages to the plaintiff. In this case of Kelly Kanton Labaj and Third Coast Auto Group, LP VS Deeann VanHouten the defendants were liable for her injuries because they knew or should have known of the dog’s dangerous and vicious propensities.