Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly. Plus, the maintenance required to stay public is too expensive for smaller companies, forcing companies to look elsewhere to raise capital. Rising costs persuade large numbers of companies to exit the public markets to sidestep SEC regulation, creates two problems. First, the overall economy could suffer because corporations limit investment projects due to the higher-cost sources of capital to fund potentially new operations. Second, financially stressed companies that go dark are the very companies’ shareholders need to monitor usually and where transparency is most important.
5. The confidentiality agreement did limit the scope of the audit performed on ZZZZ Best. It is the job of the auditor to obtain sufficient and appropriate evidence. When Ernst & Whinney were not allowed to follow-up with anyone involved in the restoration process that limited their ability to gather evidence. The company should have been able to follow up with all venders and customers to attest to the validity of the financial statements and they were not able to do this and not able to gather the “appropriate and sufficient evidence” needed.
There was not process in place to follow for recovery for when a mistake was discovered or a problem was reported. The funds were not distributed for the natural disaster that they were earmarked for which has caused some uncertainty for future donations from the public and private donations. This system is supposed to be part of the corporate culture and should have established integrity for all the stakeholders. However; the American Red Cross did not have this in place which has caused turmoil within the organization and has caused them to be running a deficit and has had to downsize. A code of code of ethics should be developed for the American Red Cross.
Due to the reports produced by Select Committees not being binding governments can disregard the advice from specialists, and reports that are produced tend not to be yananymous - especially when a general election is near. Not only that, but governments can refuse to provide certain information which could be important evidence, and often select committees are under-resourced meaning they can not provide fully effective scrutiny to the actions of the executive. Public Bill (Standing) Committees are - unlike Select Committees - able to ammend and improve legislative bills. They scrutinise each clause of a bill clause by clause and ammendments can be made. These committees are formed from between 16-50 members in reflection of party affiliation in the House of Commons from back bench MPs - with the whip system in place - and are established for each new bill, and are dissolved after the report has been made.
4. One of the primary weaknesses of many financial planning models is that they: • rely too much on financial relationships and too little on accounting relationships. • are iterative in nature. • ignore the goals and objectives of senior management. • ignore cash payouts to stockholders.
The sole proprietor has the advantage of maintaining complete control over his or her business. Disadvantages: One of the greatest disadvantages to a sole proprietorship is the lack of cash flow or access to capital like loans or investors. They do not have the advantage of getting access to capital through bonds or shares and credit is based on their personal credit history. The lack of capital keeps purchase power restricted in comparison to corporations. Liabilities can be very heavy for sole proprietors depending on the nature of the business.
There are external factors that could affect Walmart and these are out of their control. These factors include unemployment rate and the labor market. Unemployment rate and the labor market status cannot be factors because Walmart can only hire base on their need, but if they discharge an employer, they become part of the external problem. Supply and demand of products that consumer no long desire is out of Walmart control they cannot make the public chose their product. Legal matter can affect Walmart in a negative manner and this will affect the demand of their products as well.
They have shown this by closing a few stores in a higher-crime-rate area because they were losing money, by only offering a very limited amount of health-conscience and organic products because they are high margin items and by declining to donate to the local food bank because of worries over lost revenues. Company Q is not displaying an obligation to its stakeholders; particularly the customers, community and employees by not maximizing a positive impact through ethical and philanthropic actions. In order for Company Q is improve their reputation they need to take on a socioeconomic approach to social responsibility. This approach focuses not only on profits but on the benefit of the business to society. Company Q can improve their social responsibility in three areas; customer satisfaction, community outreach and employee trust.
If a company’s internal controls are not working properly customers and investors will be more doubtful and have second thoughts on their investments and money being safe which will lead to having less investor and the stocks will drop. It is very important for companies to have their internal controls up to date and making sure they are working properly because this can cause major setbacks financially. But there are some instances were internal controls cannot even stop unethical behavior from happening such as shoplifting in a shopping mall or even a bank
Even though the accounting profession has guiding principles (GAAP), they are not absolute, but subject to human judgment and interpretation and, at times, the lack of compliance leads to fraud (e.g., Enron, WorldCom, and others). The human free will comes into play, as witnessed in the Enron case; principles were NOT applied or complied