The CFO for a corporation deliberately misstates expenses on the income statement purely out of a sense of loyalty to his CEO and the company. The CFO will receive no financial incentive for this misstatement. In fact, he risks losing his job by doing this. Is this an ethical violation for the CFO? Why or why not?
If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. 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.
I do not consider him being the master mind of all the dishonest moves but he hired the people to do it for him. He was aware of everything that went on in almost every deal. Jeff Skilling the then Chief Operating Officer (COO) particularly contributed to the whole mess with a very creative idea. Looking for a way to profit at all cost, he came up with the idea of Mark to Market accounting. While the accounting was marked to market, it wasn’t being handle the traditional fashion way with trading prices dictating its value.
Due to the business having such high risk liabilities it needs to be an entity in and of itself which is what this type of incorporation will allow. The process is quite simple to be incorporated; the proper paper work must be filled with the secretary of state where the business is established. When a business is incorporated as a C-corporation it becomes an entity of itself and no longer is financially tied to the owner/s. The client was very concerned about the many liabilities that the company could possibly face. As a C-corporation the business, not the owner, would be held liable for any financial damages.
As described in this case, MCI falsified its financial statements for many years. Walt Pavlo, who was in charge of accounts receivable for the company allowed to control the Accounts Receivable system because he was the creator and developer. The lack of segregation of duties took place at MCI because the same employee was able to receive payments, update accounts receivable records and/or reconcile the company’s bank account. In the case of Walt Pavlo, he felt extreme pressure from his superiors to meet revenue projections. The employees and executives of MCI similarly knew where the numbers needed to be in order to meet those projections.
SOX Reforms Corporate America The Sarbanes-Oxley Act of 2002 (SOX) enacted July 30, 2002 introduced significant changes to financial practice and corporate management regulation. Passed in the wake of numerous scandals SOX is a complex piece of legislation that requires companies to make major changes to bring their organizations into compliance (Bumgardner 2). Many believe this act has not proven worthy and will not change effect in the business world, but I think this act will help businesses and outside investing. The act holds top executives personally responsible for the accuracy and timelines of their company’s financial data — under threat of criminal prosecution. Sox address weaknesses with internal issues, requiring yearly
If the officials who are to keep the corporations in check are run by the giant companies themselves, the concept of checks and balances can almost be discarded. If the public is informed of what is going on and reacts to the bribing events, then the big companies, who hire the lobbyists, can be forced to alter their mindset by their customers, and the special interest lobbyists can become benefactors for the general
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.
The sociocultural forces, because when it comes to the media everyone wants to know what happened especially competitors to make sure the company fails. The company starts talking to the media and one word can be twisted making it seem like the company could have had all fault of the accident. I believe Arison’s was smart in keeping himself behind doors, he was able to fixed the issues that occurred and was wise enough to do it behind doors instead of having people interrogate him about the problem. The less one talks about the issue to people who are not relevant to the situation the better; the ones who needed the information were the families of the ones who were affected as well as the customers. 3.
the reluctant security guard A lawyer could tell me how to proceed without violating the law , the company policies , or my employment contract , or at least , in case I should violate one , I will still make a better informed decision Propriety of Firing Tuff Tuff violated company policy ... Paper Topic: The Reluctant Security Guard The Reluctant Security Guard A Case Study Summary of the Facts David Tuff is a security guard of Blue Mountain ... The company policy prohibited the security guards from reporting such incidents to the police Tuff complained against this new company policy ... Because of this , Tuff was fired Propriety of Tuff ‘s Action As a matter of right , Tuff had every right to speak what he spoke to the media ... Thus , his act of revealing company policies to the media is , in the final analysis inappropriate What he should have done If I were Tuff , I would have not been so rash as to incite public outcry against my employer ... Since Tuff violated company policy he violated an agreement he voluntarily entered into ... However , Blue Mountain created a new company policy ing the security guards to just escort intoxicated persons including drunk drivers , from the parking lots onto the public road ...