* The firm or the accountant losses credibility in the market, if an accounting fraud is found. * The trust built in the company over a long period of time by its investors and employees may be lost due to such accounting practices. * If the company indulges in inappropriate practices, it can affect the willingness of suppliers and customers to conduct business with it. Over time, this may lead to the destruction of the business entirely. * If company management is unethical to the extent of committing accounting fraud, the company could be subject to criminal penalties.
Unethical professional values were symptoms of systemic problems for Enron. “Enron’s systems of oversight, ethical disclosure, and corporate accountability were flawed leading to the demise of Enron” (Schuler, 2009, para. 2). In fact, in 1999 Enron directors waived the company’s code of ethics allowing the CFO, Andrew Fastow, to run an investment partnership that traded with Enron. Enron not only committed financial fraud, but it has been alleged that bribes
It did not only affect Americans, but also the whole world. The Great Depression was caused by the crash of the stock market or the lack of real investment opportunities in the 1920’s, product innovation that caused less labor, President Roosevelt believed that it was caused by the structural problems and doubted simulative spending will solve the problem, and some argued it was caused by the shift toward modern employment relation that was made by the Great War. A Depression in the economy can start by raising taxes and dismissing government’s employees and both of these actions can start a depression and both of these were done by the government in 1929. Once this is done, it will have a chain reaction where it will get to the point where the economy will fall and cause its people to live in poverty. The prices of the products will either increase or stay the same but the wages of the people will always decrease.
Only six months after Hoover took office, the economy collapsed and the Great Depression began. Many factors caused and contributed to the Great Depression of 1929. One factor would be the overproductions of many goods in the 1920s led to worker layoffs Another factor was that easy credit led to people spending more than they had, and it led to a rapid inflation that eventually caused people to stop buying. The Federal Reserve Bank, created in 1913, did a poor job which also led to the great depression. It did not monitor interest rates to help regulate the economy when overproduction and inflation had started to cause unemployment in 1928-29 and the economy seemed likely headed toward collapse.
Finally, this position was ended because of the scandal that an employee was charged with manipulating auctions of Treasury bonds. Several senior managers left afterwards. 2 years later, LTCM (long-term capital management) is founded with pursuing the same strategies, it has generated huge returns in the first couple years until Russia defaulted on its domestic debt. Another reason should be VaR’s wrong assumptions. VaR is used under assumption that positions can be undone rapidly at low cost, while it’s not applicable to systems has potential of vicious circle losses like in this case; the assumptions of hacing normal distribution of returns is also not practical; VaR does not inform on the size of loss that might occur beyond that confidence level; It’s being generated by using historical data,
Huge losses were also incurred from other industrial areas such as electricity production, textiles, non-ferrous materials and information technology. (Chiu, 2012) Lehman Brothers bonds, with a value totaling $0.76 billion, all had to be written off by seven Chinese commercial banks which purchased them because of the fall of Lehman Brothers due to the global financial crisis. The value of all sub-prime-loan-related bonds that Chinese commercial banks' held decreased by $2.3 billion from the end of November 2007 to January 2008. (Yu, 2010) There were indications that China's economy might have been going out of hand even before the financial crisis started, and the crisis only intensified people's worries. Also, from the second half of 2007 to the end of 2008, China's top stock indices diminished speedily and decreased to less than half their prices.
Workplace deviance may be described as the deliberate (or intentional) desire to cause harms to an organization – more specifically, a workplace. The concept has become an instrumental component in the field of organizational communication. More accurately, it can be seen as "voluntary behavior that violates institutionalized norms and in doing so threatens the well-being of the organization". Teachers sometimes behave contrary to the expectations and norms of the schools within the parish of St. Thomas. These behaviors are termed “workplace deviance behaviors.” In workplace deviance, employees consciously violate the rules of the organization, which, in turn, has the potential to negatively affect the organization itself, its members, or both.
To understand the psychological contract violation, I would like to explain what is PCV can be defined as, Perceived psychological contract violation (PPCV) is the sense and emotion of disappointment in construct that concerns with employees and lead them from minor frustration to betrayal. These emotions arise from their trust that the organization they choose among them haven’t kept their promises. (Morrison, 1997). It make employees think and demoralize them and generally thought comes organization’s contribution with a negative image. It provokes employees to perform their best.
The irregular accounting practices, including manipulating stock prices, caused Enron to have to file bankruptcy in December of 2001 (Thomas, 2002). The scandal is the most significant corporate collapse in the United States since the failure of many savings and loan banks during the 1980s (Hanson, 2002). Enron collapsed for many reasons. .Among the many reasons were the lack of attention shown by members of the Enron board of directors to the books financial entities and the lack of truthfulness by management about the health of the company and its business operations (Hanson, 2002). The firm’s senior managers had engaged in fraud for an extended period through a scheme in which partnerships owned by the managers could receive payment for goods and services never provided to Enron.
In the hopes that the market will recover, Lesson kept betting on the Nikkei 225, the more it declined. His decisions kept driving Barings bank into enormous amount of debt that was tactful covered through lies and mock up gains in other accounts. Leeson’s inexperience as a trader made his gambling be based on emotions rather than calculated risk. These speculations racked up the losses to an amount close to $1.4 billion dollars. 3.