There would be other stakeholders that were not mentioned such as other employees and suppliers as the detail in the financial statements are not accurate and decisions and assumptions would be made with incorrect information. b) What are the ethical issues involved? The ethical issue in this case is that Vu misstated the financials of Lim Company. Even though the value appears low and immaterial being only $1,000 to the equipment account the value represented in this account is now incorrect and the correct account(s) where the $1,000 should be located is now misstated as well. All transactions have two sides that need to be recorded correctly.
It is also important to establish that whilst the King might have been successful in the short term; he could have failed to pave the path for the long run, thus Charles was piling up trouble for himself for the future. Having dissolved parliament, the only institution which can grant the King the right to raise taxes, the immediate threat posed against the Charles was finance. Although Charles was not an extravagant King as James was, he still needed money for the general maintenance of the country; as such, William Noy the Attorney General was appointed to look through forgotten and outdated laws that could be exploited as a means of raising income for the Crown. Various non-parliamentary finances were discovered and employed with the most lucrative ones being the Distraint of Knighthood whereby men owning estates worth £40 were suppose to present themselves as knights and those whom did not were fined as well as Ship Money, which is a levy to raise money for ships to be built to protect coastal areas from pirates. However, it is important to note that both of these sources of income were ancient and had been long unused.
The prime motivation behind the decisions of Arthur Andersen’s audit partners was money and lining their own pockets. The desire for money drove partners to ignore the possible outcome of their actions. If they had recognized the precarious position they were in, AA leadership might have corrected the flaw in the AA internal control that allowed the Enron audit failures to happen. AA was the only one of the Big 5 to allow the partner in charge of the audit to override a ruling of the quality control partner. (Brooks, 2007, p. 109) I find this to be an interesting statement from the text and want to ask, “How would someone trained to look for serious situations such as the Enron audit failures not know the position they were in unless completely ignoring the situation for financial benefit?” “The final disintegration of AA was not caused directly by the Enron audit deficiencies, but by a related decision to shred Enron audit documents, and the conviction on the charge of obstruction of justice that resulted.” (Brooks, 2007, p. 111) If the partners did not
That is not how his story ended up though. He is currently trying to file a lawsuit against the financial institution that had helped him with his mortgage because of the lack of information provided to him as well as a full understanding. (http://en.allexperts.com/q/Real-Estate-Home-1842/2008/2/Disaster-1.htm).This goes to show that this happens a lot when purchasing a new home. Some loan officers are not really worried about your financial needs and are not accurately doing their jobs by getting the person the type of loan that best suits them. It is wrong and the loan officers should get in trouble in some way because letting people get things that the officer most likely knows that they can’t afford is just setting them up for failure or
The only problem with this scenario is that in the event of Craft Foods declaring bankruptcy, they will have no collateral to repay their investors. Debentured bonds are an unsecure investment and results in the company taking a very large risk to offer them. If the company fails and is unable to pay those bonds, there could be large legal repercussions as well as various government accounting agencies taking a closer look at the practices of issuing debentured bonds in the future. Requirement 2 Next Ms. Walden writes in more detail about the psychological reason behind the securities being priced as they were. She feels that the main motivation for this company is risk.
According to Mike Masnick, in the article, A Day In The Life Of Legalized Extortion: How The BMI Shakedown Works, illustrates that this is all legal but has the hallmark of a shakedown, making companies like BMI and ASCAP notorious for doing more harm than good. Furthermore, because of the way these systems work, they tend to funnel money disproportionately to big name artists while harming less well-known songwriters. BMI has been particularly obnoxious about this. For example, and undisclosed songwriter, did not receive any of the promised royalties, and when this matter was brought up, BMI responded that it was not their problem. One BMI employees even said, “I would like to tell him that he needs to write a hit song.” (Masnick) BMI also uses tactics of spying on venues to see if they’re playing music.
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.
Peo-ple are people and while most are good we all know that there are those who will take advantage of others if they can. Such is the case with the current economic situation and let me assure you this will not be over in the foreseeable future. What is happening on Wall Street is tied to the sub prime mortgage mess. That in turn is tied to those in Congress and what went on with Freddie Mac and Fannie Mae. The story is going to be a mess till all is said and done.
That’s the thing with an oral contract is it still needed to be recorded in some way whether the conversation is documented by text or by audio. It’s really a catch twenty two, but in this particular case they tried to sue for breach of the long term financing contract that was never valid. For a contract to be valid the contract needs to be detailed in this case it wasn’t. The offerer and the offeree never spoke about the details of the long term contract the important information. For all I know they could have been talking about an alternative to switching to a long term contract or maybe asking the bank permission to change the contract.
Such companies are not the best choice for investors to invest in. The Sarbanes-Oxley Act The Sarbanes-Oxley Act is very detailed because Congress wanted to make sure that there were no loopholes that the companies could use to trick their investors. They wanted to protect investors as much as possible. Even though the Act is so long, there are a few key sections of the Sarbanes-Oxley Act that give a detailed summary of the whole Act. Some of the most important sections are as follows: • Section 201: Services outside the scope of practice of auditors • Section 302: Corporate responsibility for financial reports • Section 404: Management assessment of internal controls • Section 409: Real time issuer disclosures • Section 802: Criminal penalties for altering documents •