As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain. As long as people choose to be dishonest and unethical in their businesses and personal choices when it comes to finances, there will be financial fraud and investors will suffer financial
Ethical and unethical aspects of the accounting activities Within the WorldCom case, it became evident that there were multiple unethical actions and decisions made by many individuals. The unethical actions began with the upper management of WorldCom when they falsie booked line rental expenses. The unethical actions continued to the accounting department when they recorded inaccurate entries without any reason or backup. The last unethical aspect occurred when Scott Sullivan and management attempted to cover up the falsified accounts while discouraging Cynthia Cooper’s investigation. The ethical aspect came from Cynthia Cooper and her team.
This is a problem that a lot of nig corporations face these days when being funded by investors or government agencies. There are cases from the past where government funds were given to an organization to use for training purposes. When funds are coming and going in an organization, un ethical people do not record all the necessary information to track the funds correctly, showing that there is more available that there actually is. When this happens, audits are necessary to find where the monies are missing from, eventually exposing the guilt parties so that they can be prosecuted for their
It gets to be an even bigger problem when the mortgage loan officer doesn’t help you out with your decsion when purchasing a home. When loans are approved for people who are unable to afford them sometimes the officer changes numbers around in the application to make the income to debt ration number smaller to get the loan “workable”, and this has casued many fraud cases. (http://activerain.com/blogsview/791334/Things-The-Loan-Officer-Cannot-Tell-The-Real-Estate-Agent-But-REALLY-Wants-To). Every now and then a few of these careless people are being caught doing this horrible deal with people who are most of the time unknowing. There is some talk that there are going to be new rules applied to the mortgage industry for the loan officers to carry out when helping people decide on a loan that’s rihgt for them.
It uses Public money unnecessarily and is unfair to taxpayers. It makes financial reform going forward much more difficult. Protecting the markets for derivative products like CDOs and CDSs allows for a repeat of the risky practices that got us into the current crisis. And finally, by guaranteeing the corporate existence of large banks, we are maintaining their power and priorities and thus are not likely to see gains on predatory lending, foreclosure abuse, and other areas where reform is sorely needed. If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind.
| Question : | (TCO A) Who are the primary victims of financial statement fraud? | | | Student Answer: | | Employees and middle management. (Incorrect- While they are negatively affected by fraud, they do not rely on financial statements to the same degree as stockholders.) | | | | Organizations that buy goods or services. (Incorrect- This is the victim of vendor fraud.)
With retirement come concerns about finances, concerns about mental health and concerns about physical health (McGarry, 2004). This position paper will take a look these three areas of concern that can an individual and their retirement in a negative way. In a study that was recently completed, 58 percent of retirees reported that they were bothered by the high cost of living, and
Auditor Crazy Eddie Question: What specific mistakes (apart from failure to notice “red flags”) did the auditor make? For each mistake, describe what the auditor should have done. If you were the Managing Partner for the CPA firm and had full knowledge of all the facts and events in this case, what changes in policy or procedures would you implement to make sure this audit failure does not occur in the future? The Crazy Eddie's financial statements had many fraudulent over and understatements done in many ways that the auditors should have caught. They created fictitious revenues by a number of means.
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
The offenses are harmful to not only businesses in the United States of America but to the world of business as a whole and are unacceptable. If the law had been in place, many shareholders would have been safeguarded but numerous investors lost their lifetime savings by company insiders. The corporate world is a much more secure place with regards to investing with all of the changes and modifications which are now enforced. I still think there are other actions which can be taken to protect shareholders even though the modifications have significantly improved the procedure. Businesses must develop an ethical balance so as not to take advantage of unknowing shareholders who have invested their lifetime