Their accounting system used corrupt measures to show profits. By using special-purpose entities (SPE), they could move assets through their books showing profits. They hid losses from its shareholders and employees. Integrity was thrown out the window by its top managers. Jeff Skilling created performance evaluation process for all Enron employees called “rank and yank”.
SOX also sought to strengthen consumer and investor confidence and confidence in financial information by changing the auditing procedure and making management more accountable for fraud prevention, catching, and existence within the pot. Lastly, it shielded whistleblowers from corporate retribution and endowed them with protecting freedoms. Based on aforementioned information, I would like to consider the implementation of SOX would have been an immediate check to financial statement fraud in its initial launch in 2002; unfortunately, there will invariably be somebody who believes she is above reproach and disregards societal measures of intellect, decency and control to pursue her own
Robbin Industries is jeopardizing itself by not properly reporting the advertising costs. As an operating company, they must understand the generally accepted accounting principles and adhere to them (Weygandt, Kieso, & Kimmel, 2010). (c) What would you do if you were Wayne Terrago? Wayne Terrago should try to report the financial condition and results of operations fairly and in accordance with the generally accepted accounting principles. As controller, Wayne should inform management and understand what is acceptable according to the GAAP.
Ethicality of Accounting Activities The WorldCom case is an example of unethical behavior performed by a company by abusing accounting activities to reflect misleading financial information. In this case the main cause of this unethical behavior is greed and neglect by the executives that allowed and encouraged this behavior. On the other hand, WorldCom employee Cynthia Cooper is a prime example of ethical behavior that took place to uncover the wrong doing of individuals. Upon reading an article of a former financial analyst, Cynthia Copper’s mind was intrigued, an audit was conducted on capital spending. In the WorldCom and Cynthia Cooper case unethical behavior was evident in multiple departments and involved top key players that tried to cover up the fraud.
The responsibilities of an audit partner in an accounting firm is to review the accounting actions performed by their client and notify them of any corrections that are required. The CFO of a large public company should oversee all of the company’s finances so that it is steered in the right direction. The audit partners role is weighted heavier in that their responsibility is to the public, not just one company. If the CFO is unable to do his/her duties, then the audit partner should find and report those inaccuracies. The stress of the audit partner is tremendous and choosing that profession is one that I would prefer not to undertake.
| SOX was enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. | GLBA | The Act consists of three sections: The Financial Privacy Rule, which regulates the collection and disclosure of private financial information; the Safeguards Rule, which stipulates that financial institutions must implement security programs to protect such information; and the Pretexting provisions, which prohibit the practice of pretexting (accessing private information using false pretenses). The Act also requires financial institutions to give customers written privacy notices that explain their information-sharing practices. | GLBA helps to protect private financial information of financial institution’s customers. | HIIPA | This act gives the right to privacy to individuals from age 12 through 18.
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
This account can be the target of fraud in the organization because it can be intentionally misstated and violate the accuracy assertions. Employees can easily misstate the amounts that a fundraising event actually cost the organization and pocket the discrepancies. The auditor should do analytical procedures and substantive tests in order to detect these misstatements. Additionally this account should be analyzed and compared to the bills the organization has on file. The final account that is on the balance sheet under the net assets and fund balances of the balance sheet would be the unrestricted net assets account.
Kevin Pfeiffer, a computer technician on new hire probation, was asked to act unethically in regards to an insurance claim. He made an ethical decision to not participate in the unethical practices of insurance fraud carried out by the organization. Kevin’s manager, Antonio Melendez was familiar with the rumors of the alleged insurance fraud; however, this was the first time a fraud situation was brought to him directly. This analysis will focus on the ethical dilemma faced by Antonio and discuss strategies for addressing the situation. Analyze the ethical dilemma faced by Antonio The ethical dilemma that Antonio faced was weather to report the issue to the proper corporate officers himself, have Kevin Pfeiffer make his own decision regarding the issue, or ignore the issue altogether because the insurance proceeds will benefit the organization as a whole.
INTRODUCTION At times we may wonder what is meant by ethics, why accountants need ethics in their business life or even how they are related. As we may know, definitions of ethics vary with time but in most cases it is defined” With these definitions we can understand that basically ethics is knowing what is right (Mitchell 2009). Ethics in accounting and finance a global concern today (Onyebuchi, 2011). However, the accounting and finance sector has over the past years developed a culture of ethical misconduct (Gianneti & Yue Wang, 2014). According to Anup & Chadha (2005), Ethical misconducts often lead to corporate scandals that come with serious consequences e.g.