When the auditors are provided with an incorrect address for Wow Wee’s receivable, the auditors could not contact the client’s customer. They solely rely on the former CFO’s offer to contact the appropriate individual at Wow Wee to ensure that the confirmation was returned to Coopers. However, this is a big mistake because it gives the CFO an opportunity to forge a confirmation. This mistake involves negligence on the auditors because they should be aware of this red flag. It is highly possible for the CFO to forge a confirmation about the accounts receivable.
According to Inamori & Analoui, (2010) the observance of clearly defined instructions from one boss improves motivations as one seeks to fulfil clear tasks devoid of confusion Peter Gibbons needs not being met at Initech There are several discomforts for Peter while working at Initech. Firstly, Peter lacks job security. The making of mistakes could lead him to getting fired. He cynically confides to one of the efficiency experts that the fear of losing his job and, not being hassled, are his motivation factors.
It appears to me that Enron’s directors would have stopped these activities if they had understood how profits were being made during this time, so I do not believe they did know. 5. Ken Lay was the chair of the board and the CEO for much of the time. How did this probably contribute to the lake of proper governance? Yes, he did not conduct himself with the responsibility of a CEO by being fully aware of what was happening in the company.
You will be introduced to Monte Carlo analysis and you will use this to decide on the optimal capital structure for Diageo. Learning Objectives The static trade-off theory of capital structure is one of the models used to determine the optimal capital structure. While tax shield are well understood, the sources and costs of financial distress, particularly in a dynamic setting, is less understood. This case studies the capital structure decision of a firm that is undergoing fundamental changes in the business. The heart of the case is a model that is developed by the firm’s corporate treasury staff to help them think about the static tradeoff of tax shields and financial distress in a dynamic setting.
The Ethical Dilemma of Outsourcing. This paper will examine the phenomena of outsourcing from an employee and corporate perspective in an attempt to gain insight into the pros and cons of the outsourcing issue. The researcher proposes that outsourcing is morally and ethically an objectionable practice; the results show little benefit to the company and much harm to the employees it effects. A formal review of the literature available with regards to outsourcing is analyzed, and the case against outsourcing is made. The researcher shows how outsourcing impacts workers in a negative manner, goes against the moral and ethical standards inherent in business and proves that outsourcing will ultimately result in dissatisfaction for corporations in the long term.
They should not use their power to achieve their personnel targets and objectives. What Allen did is use his authority to recruit his daughter in other company where there is business relation with this company from where many of his firm supplies from this company, and in the same time the president of this company ( Garbo ) is his friend. So what he did is involve in what we can called conflict of interest. Using his power and authority to achieve personnel objectives On the other hand what Garbo did is totally wrong, as to keep the customer which is Allen Firm he hire the vice president daughter. May be he retain the customer to increase the volume of the sale but in the same time he breach the procedures and the policies of his HRM organization, as in every organization there must be procedures and process in recruitment, and some conditions should be available in applicants to be recruited like qualification and experiences, but this was not the case while he recruited Amber, and there will be adverse impact when nepotism used in any organization, as it will destroy the employees morale, and for sure this will be having negative impact on the efficiency and productivity of the others employees as they will feel that KPI will not work honestly as the close relationship with president will be more effective.
In addition, an inherent conflict of interest exists when management, which has the responsibility for preparing financial reports, cannot impartially report on its own achievements. In this case study, we consider the possibility that a Publicly Traded Company’s (PTC) auditor discovered in the firm’s financial statements activities that were masking economic realities through active manipulation of earnings. We will discuss current income-smoothing strategies and tackle the issue of whether they are ethical. Data included in our research will provide the Board points to consider when determining the standards to follow regarding policies of income smoothing at PTC. It should also be considered that managers in the financial reporting department may feel their positions are contingent on positive earnings results.
What impact does the act have on the corporate accountant, on creditors of a company, on investors in a company, and on customers of a company? Corporate Accountant had to present the most
According to SAS No. 99 fraudulent financial reporting can be committed by manipulation, falsification, or alteration of accounting records and/or supporting documents which are used to prepare financial statements. Misrepresentation in and/or intentional omission from the financial statements of events, transactions, or other significant information. Intentional misapplication of accounting principles which relate to specific amounts, classifications, manner of presentation, or disclosure (Crumbley 2007). Fraud can occur in overstated revenues, management estimates relating to acquisitions, bad debt allowances, and pension and other
SOX instituted major changes to the regulation of financial practice and corporate governance. Of the key components of SOX, section 404 has gained the most attention and requires public company auditors to attest to the effectiveness of internal controls and fair presentation of financial statements, in all material respects. The Sarbanes-Oxley Act has greatly impacted the auditing landscape; however, how has it specifically impacted the Banking sector? What are the civil and legal issues and consequences for the auditing profession prior to and subsequent the Sarbanes Oxley Act? How has the Sarbanes-Oxley Act impacted accountants, auditors, and stakeholders of financial institutions?