Due Friday 3/30 at 8:oo pm; Late Assignments not accepted Open the attachment entitled “Life Expectancy Worksheet”. Follow the instructions to complete the worksheet, then answer the following questions: 1) By how many years did your predicted longevity change as a result of the factors listed below? For each factor, a negative change indicates a decrease in longevity and a positive change in years indicates an increase in predicted longevity. a. Genetic history.
Under SOX, all publicly traded U.S corporations are required to maintain an adequate system of internal control by means of developing principles of control over financial reporting as well as continually verifying that these controls are working. LJB needs to ensure that it corporate executives and boards of directors’ controls are reliable and effective. Additionally, independent outside auditors must attest
Introduction Companies have to answer to numerous people on the decisions they make and rarely are companies able to hide mistakes. They may think they can keep mistakes a secret, but almost always, the information eventually comes out and generally in a very public way. Executives and managers have an obligation to follow certain rules. There is a Civil Code that outlines the obligations of corporate directors. Article 144 requires “that a director/officer does everything in their power to serve the interests and obligations of the corporation first, ahead of any personal interests; does everything in their power to serve the interests and obligations of the staff, ahead of any personal interests; does everything in their power to serve the needs and requirements of customers ahead of any personal interests” (United America, 2009).
Changing the formatting and organization of financial reports is a big undertaking for most businesses, but to require businesses to redo many years of financial data into a new format would be a great cost and a source of great frustration for companies. As I reviewed the format of example 1 on page 115, at first glance I was opposed to this change. The format was unfamiliar and difficult for me to read since I am accustomed to separate income, balance sheet and cash flow reports. But once I took my time to read the detail captions, I see how this format could make reading financial statements easier. I found the flow from assets/liabilities to income/expenses and finally ending with cash flows a better system than using three reports to review separately.
- Compliance Department (1,2) Why: A bank should ensure a strong compliance culture throughout its organization, where the board of directors and senior management set the right tone. The board of directors and senior management (including Head of the business and Supervisors) should set a clear risk appetite and ensure a compliance culture where financial crime is not acceptable. The Third Line of Defense helps the Bank to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. How & Who: Develop policies for periodic internal audits (5) covering: Adequacy of bank’s policies, procedures and controls identifying key risks, addressing the identified risks and complying with laws, regulations and
These are the tools that are used by managers of a business. This method is used to make sure that the business operates according to plan. In Needles (p. 265), internal controls are defined as management’s responsibility to establish an environment, accounting system, and control procedure that will protect the company’s assets. Internal controls can be classified as either detective or preventive. Preventive controls are used to prevent and/or minimize errors or irregularities.
GAAP stands for Generally Accepted Accounting Principles. The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements.
I conclude that although the abuse of the profession by investment institutions aggravated the financial crisis, accounting cannot be said to be a root cause. Second, I look at the potential of accounting to help with the resolution of the financial crisis. I argue that by enhancing the accounting standards and acting to eliminate weaknesses therein, accounting can play a significant role in aiding the global economy to recover. Several allegations have been made against the accounting profession, accusing it of precipitating the financial crisis. Of these, I believe two in particular depict the role of accounting in the financial crisis, these being the effects of fair values and the overly complex (and thus allegedly detrimental) nature of financial reporting.
Many times companies break accounting procedures and falsify their financial statements in order to please both internal and external users. Even though this is a violation of the SOX act of 2002, corporations still chose to engage in these activities. The final thing we learned about is the ethical decisions made behind financial reporting. The AICPA Code of Professional Conduct was put in place to make sure companies have a standard to follow when creating financial statements. Legality Financial reporting activities and standards Earnings management has been used as the manipulation of the current standard of financial reporting established by G.A.A.P.
Impact of Unethical Behavior Analysis Impact of Unethical Behavior Analysis With a rich history in financial scandals, organizations need to protect themselves against bad publicity. The scandals highlighted the need for legislation. “Congress passed the Sarbanes-Oxley Act (SOX) to provide greater protection against corporate and securities fraud for public companies, mandating stronger internal controls, independent audit committees, the creation of anonymous hotlines, and, importantly, the implementation of safeguards against retaliation.” (Bannon, Ford, & Meltzer, 2010). While the effectiveness of the legislation has been heavily debated, there are still opportunities for unethical behavior. Top executives of companies are hired to improve performance and the pressure to do so can lead them to take unethical action to ensure their success.