Anderson didn’t do this. He swindled the investors, and the public by keeping all information quiet. Anderson did amount of contribute to the disaster when they overlooked the management by the let down to have Enron direct and enforce their own company internal controls. The flaws that Anderson had is his own internal control. There has to been beliefs the partners were more motivation by the revenues recognition, overlooking things and providing services to the company.
Question CA1-7: Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Comment on the appropriateness of this viewpoint. I do not believe that this viewpoint is a good idea.
When a company is controlled with general partnership both owners are held responsible for the partnerships debts, similar to that of a sole trader. On the other hand with limited partnerships a company is controlled with both limited and general partners however the limited partners only act as investors and have no control over the running of the business and do not fall under the same liabilities as general partners. Partnerships are able to raise financing through debt factoring. This essentially means that a business will sell their invoices to a third party company and receive loans from the bank based on how much they will make from these invoices. The main advantage of having a general partnership is the fact that you are able to set up you company with ease, you wouldn’t need
While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line. For a manager to evaluate the impact of marketing they will need view the current marketing expenditures, sales, and profits to make a conscious decision on what methods are working. While I think placing marketing as an investment is a good concept, determining the value is too biased without a common measurement between all companies in a similar industry. Without understanding the current value of marketing, the marketing budget will be one of the first items cut when the business is in a downturn. Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past.
The ex-partners appealed by asserting the following arguments: 1. If the corporation had still be in business, the money paid for the settlement would be considered ordinary business loss, and since they were now liable for the corporation’s liabilities they should also be able to benefit of the same tax treatment. 2. They also argue that in the year of the correction they did not buy or sell anything for such reason capital gains or loses did not apply to them. ISSUES: the following issues arose from the case: 1.
“According to Mintz, “Integrity is a fundamental trait of character that enables a CPA to withstand client and competitive pressures that might otherwise lead to the subordination of judgment.” The priority must be based on the professional responsibilities first rather than looking at the personal interest first. What if the mistake is caught and then there will be no job rather than except the mistake and tell the superior authority there might be chance that the superior authority might give a chance and u can save your job. Secondly In accounting, the public interest (i.e., investors and creditors) always must be placed ahead of the one's own self-interest or the interests of others, including a supervisor or client. (Steven M Mintz 2)” The answer does not change whether it impacts other aspects of operations. Certainly, it is more important to report
It will be a violation of your personal ethics to overlook this error and falsify information to cover it up. You could be the one to lose your job. Gena Schmitt could lie and say that you covered up the whole transaction by yourself and you would be the one taking the fall. B). The ethical considerations in this case include violation of internal controls, falsifying the bank statement and deposit transactions, and lying.
Michael Royston Bus-110 MWF Accounting Essay 3-26-2012 In-House Accounting Doomsday Mistakes Running a business by yourself can be hard, especially when you opt to take the full responsibilities of owning or starting a company. One of these responsibilities is accounting, which can be the death of a company if done wrong. Here are some accounting mistakes that can pull you and your business six feet under. The first mistake is having insufficient software. When you decide to take the path of in-house accounting, accounting software is vital to your company’s survival because your business does not have an accountant.
What was the primary motivation behind the decisions of Arthur Andersen’s audit partners on the Enron audit: the public interest or something else? Cite examples that reveal this motivation. The primary motivation behind the decisions made by Arthur Andersen’s audit partners was the revenue generated for their company. Arthur Andersen failed to act on their own internal policies when concerns brought up by the quality control officer were dismissed and the quality control officer was fired. This left the firm vulnerable to the decisions of the people with the most to gain from the audit.
Mary is his supervisor. There was a letter written to the CEO about the recently installed system and its not performing as expected. The system was very expensive and should be making money not losing money. Joe knows the performance of the system isn’t up to par. Joe has notified Mary about the system’s problems.