4. Analyze the accounts impacted and / or accounting guidelines violated and the resulting impact to the business operation. 5. As a CFO, recommend which measures could have been taken to prevent this ethical breach and how each measure should be implemented in the future. 6. 6. Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources Introduction The principles of business ethics help companies to increase their positive outcome, while lessening the ill impacts of their business activities on the general public. Even if, business ethics are frequently used as a substitute of corporate social responsibility, it is important to note that business ethics are chiefly associated to business decisions that the society considers as right or wrong. The implication of accounting ethics in the interest of the society is larger than before in the contemporary aggressive business environment. The concept of accounting ethics had developed recently after the occurrence numerous high profile corporate scandals that resulted in the collapse of organizations like Enron and Worldcom. Governments have also been endeavouring to increase the regulation and monitoring of companies in order to ensure the safety and protection of interests of the common investors and the preservation of business ethics as well as social responsibility in the business environment. It is now obligatory for publicly listed companies to issue their audited annual accounting reports, consisting of full financial information of the company. The primary objective of business ethics monitoring consists of the formulation of regulatory policies that aims to safe guard the interests of the society as a whole. Thus, in comparison to the past, the present business and regulatory environment is relatively more conductive to ethical behaviour. In this study, we would focus on the recent accounting fraud in Satyam Computer Services. Satyam Computer Services Ltd. and the Accounting Scandal The company was instituted in India in the year 1987 by B. Ramalingla Raju, the founder and chairman of the company. The company operated in information technology as well as business process outsourcing across a number of industries. From the year 2003 to 2008, the company performed really well in terms of finance as well as business. It realised a decent yearly compound growth rate during that five-year period and its revenue during 2008 was over $2 billion. However, during the later parts of 2008, it was found that the Chairman of the company had actually tunnelled the profits of the company by means of self-dealings. As a result, the main loses in this case were the small investors while the promoters of the company benefitted illegitimately. As a result of the disclosure of the accounting scandal, companies like Merrill Lynch as well as State Farm Insurance discontinued their associations with Satyam. Additionally, the share price of the firm fell to an all time low owing to the scandal. Following this the board of the company was dissolved and new nominal directors were hired by the Company Law Board. Nevertheless, the business operations of Satyam were acquired by Tech Mahindra during April 2009 to form a company named ‘Mahindra Satyam’. The Satyam case was contradictory to the Enron Scandal where
Running head: Review of Accounting Ethics Review of Accounting Ethics Nicole V. Monroe Professor Juanita Edwards ACC 557 Financial Accounting June 1, 2015 Questions that need to be address in the paper 1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior…
However, many organizations still succeed in finding out the loopholes in the accounting standards and seek the room for manipulating the financial statements. There are various motives, which work behind such accounting breaches practice. For instance, the financial statements are reflected to the users of financial statements in such a way that the true picture of financial performance and position of the organization can be replaced with ready-made financial result in order to reflect the desired portrait of the organization.
d work for the best interest of their stakeholders. The management at every step has to make policies for improving the business operations. The policies should lead to profit maximization, sale maximization, maximization the market share, attracting the customers but should not compromise the trust of the customers by providing low quality products for attaining high profits.
A list of grant recipients is required to be available, for example, in an appendix to the report, on request or through the Internet," (Department of the Prime Minister and Cabinet, op. cit., page 14).
Grants associated with income, as in the case of the subsidiary receiving the grant to educate its students, are sometimes represented as a credit in the income and expenditure statement.
The situation stems from a lack of focused effort on operating efficiency systems and an emphasis on outdated reporting techniques which negatively impact decision making. I believe we are poised to gain competitive advantage from our recent organizational restructuring and having worked closely with our units in Europe and in the UK.
Under Activity-based costing, Widgets and Gadgets exhibit positive GM rates of 12.8% and 3.1% correspondingly, while the new product Helios has a negative GM rate of -0.8% and decreases the division's overall profitability. Noteworthy, Widgets brings 41% of sales volume and almost 74% of the total gross margin for the division, continuing to play a "cash cow" role for the division.
Revenue & collection cycle, the acquisition & expenditure cycle, and the production cycle are all faced with the inherent risk element.
In all the cycles, the inherent risks may result from the complexities that are involved in the process. In the case of R & C cycle,
It is the most common form of cash fraud as the books remain balanced while there could be unrecorded sales or understated sales (Silverstone & Sheetz, 2007). It can also be practiced by manipulation of
Product differentiation therefore, is the practice in where enterprises offer products or services with unique features to consumers. This approach will immensely help DSC gain competitive lead over already in the market and potential investors.
The average accounts receivable balance is $20,400. How many days on average does it take the firm to collect its accounts receivable?
14. Jennifer has annual sales of $367,200 and cost of goods sold of $198,600. The average accounts receivable
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