1 The accountants in this case faced with ethical dilemmas are: .Rusell Smith; Helen Shepherd ; Roger Schlonsky and the subordinates. The accountants in this case who faced ethical dilemmas were Russell Smith and William Kaye . They both were instructed by top management to practice unethical accounting . Russell Smith was told to sign an affidavit stating that United Airlines (UAL ) paid Cardillo 203 ,000 for an unspecified transaction and that Cardillo 's equity was more than 3 million . Had he succumbed to the pressure inflicted by his boss , A Walter Rognlien , false documents would have been presented in court in favor of Cardillo .
Citigroup Merger Scheme The film The Inside Job provides a in depth look at the various ethically ambiguous business practices that take place in The U.S. and around the globe which helped spark the financial crisis of 2008. One such practice, the merger of Citicorp with Travelers, used morally questionable business practices in order to become the largest financial services company in the world. In 1998 these two companies merged to become Citigroup. The problem with this merger was that it was illegal, and a clear violation of The Glass-Steagall Act, which was enacted on the heels of The Great Depression in 1933. This Act prevented banks with consumer deposits from engaging in risky investment banking activities.
In practice, Goldman was providing false information to its clients because the company it created was not truly as profitable as the inflated share price would indicate. The executives at Goldman were fully aware of this but yet they continued to layer additional companies into the strategy because it would only appear successful as long as the market continued to grow. In the use and application of this practice, Goldman was lying through both commission and omission; and its lies not only affected its clients, but the market as a whole. By taking advantage of this particular strategy, Goldman Sachs was contributing to a factor that led to the stock market crash in 1929 (Jennings, 2012) During the 1990s, within the financial investing market, there had been a standard underwriting practice that required a private company to demonstrate a
Antitrust Claims against Microsoft Monopolies, Trusts and Government Regulations Monopoly occurs when a large corporation or business fixes price to eliminate competition because they are the only major provider of a particular product. Monopoly affects economic growth negatively because since the price cannot be determined by the market, business is restricted. Trusts in business enable confidence to be built so that business can be conducted in fairness. Antitrust policies are regulations by government to ensure that businesses can operate on a certain degree of trust thereby ensuring that the market is not monopolized. Since monopoly caused unreasonable price hike, government must be able to exercise control or consumers and the economy will both be affected.
Madoff defrauded thousands of investors out of billions of dollars, $65 billion to be exact. Madoff claimed to have started the business in the early 1990’s, and those charged legitimate. However, federal investigators believe that the fraud began as early as the 1970’s. If this true, by all means his family knew of the scheme, and had something to do with it. Concerns about Madoff’s business surfaced as early as 1999, when financial analyst Harry Markopolos informed the U.S. Securities and Exchange Commission that he believed it was legally and mathematically impossible to achieve the gains Madoff claimed to deliver.
Recently, the market is on an uptake with its improving stocks & bonds. The light in a year-plus-long tunnel is bringing both hope and realization. The market improvement is also shedding a truth on a troubling facet of the economy, the 401(K). The realization Stephen Gandel, of “Time Magazine”, has highlighted in his article “Why It’s Time to Retire the 401(k)” focuses on the sad truth that 401(K) is not effective and thus can not be relied on. 401(K) has become ineffective because of the corruption of big business, the misunderstanding of and as a result a mishandling of the 401(K) accounts, and its correlating dependency on the market’s success.
He began falsifying the books to give the impression that WorldCom was doing well. This resulted in Ebbers also pressuring other employees to commit account fraud. Without a these loans and a direct tie to company performance, Ebbers may have been under less pressure to ensure the company continued to perform well may not have had the incentive to commit this kind of accounting fraud. When stock prices declined and Ebbers received margin calls, instead of Ebbers selling his stocks which would have further crashed the price of WorldCom stocks, the compensation committee approved Ebbers loans and guarantees that exceeded $400 million. Even when the Board learned about the loans to Ebbers, because the loans needed to be disclosed in the company’s third quarter 10-Q report, the Board ratified and approved the compensation committee‘s actions.
Group 3 – Martha Stewart: Inside Trader There are many critical ethical issues that exist in the case involving Martha Stewart, Sam Waksal and family, and Peter Bacanovic. If these unethical concerns were to be numerically ranked, with number one being the most severe, the list would be the following: 1. Sam Waskal selling his family’s shares and attempting to sell his own shares of ImClone before the news of Erbitux had been publically released, in an attempt to save their money without any concerns for how it will impact the shareholders of the company. 2. Bacanovic tipping Stewart with non-public information received from Waksal knowing fully it is illegal and ethically wrong.
Sarbanes-Oxley Act and Unethical Behavior Sarbanes-Oxley Act and Unethical Behavior Before 2002, companies financial reporting was loosely watched by the government. Many investors did not think about improper accounting as long as they were receiving the positive news about the company they invested in. When the financial scandals started, the government knew that they had a problem on their hands. In 2002, they passed the Sarbanes-Oxley Act that made companies more accountable for their financial reporting and honest accounting. There are many reasons corporations and employees decide to choose unethical practices when dealing with accounting.
Because of Mr. Madoff’s dishonest activities many of the people who trusted him lost everything. There is no place for fraud in business, the innocent are affected, a company can suffer monetary damages, damage its reputation or even shut down which will also affect the employees of the company who could possible lose money and their jobs. Theft is defined as “the act of stealing; the wrongful taking and carrying away of the personal goods or property of another; larceny.” Theft is also unethical and illegal and has no place in business. Through his Ponzi scheme Mr. Madoff stole millions if not billions of dollars for innocent people. It was alleged that Mr. Madoff made false statements.