auditing,governance and scandals

auditing,governance and scandals Coursework example
High school
Coursework
Finance & Accounting
Pages 3 (753 words)
Download 0
Name: Course: Date: Problem of governance of A.I.G. (American International Group) A.I.G is the global leader in the world insurance and financial services, with its branches and affiliate companies operating in over 130 countries globally. The company has dominated the insurance and financial services industry in the world for some decades now, owing to its large capital base and profit making trends…

Introduction

The problems that faced A.I.G are not purely financial crises brought about by the tough global economic condition or any form of catastrophes. The problems, as evidenced by the Mutual fund scandals (2003), the Insurer bid rigging (2004) and AIG accounting scandal (2005) were purely caused by managerial twists and dysfunctions (Evans, 2012 p62). The management administration and governance failures saw the company plunge into a deep financial crisis, from which it has been trying to recover until present day (Markham, 2005 p510). The management and governance failure for this organization are traceable in several of the management deliberate misdeeds. First, the company took a huge amount of funds that were collected from securities lending, and invested them in the subprime bonds. Additionally, the company comingled its insurance subsidiaries to give it back some more money for that purpose (Boyd, 2011 p72). In so doing, the company ignored all the risks involved in operating liquidity subprime bonds and went on to commit huge amount of its customer’s funds to this risk. ...
Download paper
Not exactly what you need?

Related papers

American Accounting Scandals
55, 2009). Interestingly, this is not the first time in the history of United States that its accounting practices, approaches and system has received criticism and strict scrutiny from its stakeholders. After the bankruptcy of Enron and WorldCom in 2001 and 2003, respectively that was also the biggest accounting scandals of their time, the US accounting practices made the headlines all over the…
Corporate Governance, The fraud-Governance Linkage, and Audit
Corporate governance encompasses regulatory and market mechanisms and goals on which a company is governed. Corporate governance also highlights the roles and responsibilities of stakeholders such as an organization’s management, board of directors, shareholders, and other stakeholders. Corporate governance avails guidelines centering on the way in which corporations should be governed in order…
Ethics in Accounting and Corporate Accounting Scandals
The suggested course of action by the companies is also recommended in order to prevent unethical practices that lead to corporate scandals and eventual bankruptcy of the organizations. Introduction The accounting practices are based on the Generally Accepted Accounting Principles. Apart from the rule base practices, the importance of principle based practices have emerged in the field of…
Auditing. The series of scandals caused a general crisis of confidence in the integrity of the entire system of corporate accoun
Thereafter the author described financial scandals as those corporate scandals that involve misappropriation and misuse of money or economic resources. The chronicles of business history are filled with errors related to accounting, judgements, financial management and financial skulduggery. Over the last few decades unscrupulous entrepreneurs have been heavily involved in financial scandals where…
auditing
As the financial statements are the representation of management, it becomes very important to maintain the reliability and authenticity of these statements in order to avoid fraudulent activities in their preparation. The auditors have the responsibility of expressing their views related to the maintenance of fairness by the management. They are authorized with the responsibility of assessing the…
auditing. PARMALAT COMPANY. The series of scandals caused a general crisis of confidence in the integrity of the entire system o
This was one of the prime reasons which had brought the scandal under limelight. In the year 2003, Parmalat was severely penalized for trying to raise 300 million in the form of bonds (Word Socialist, 2004). The author of the study will highlight the impact of the integrity in the system of corporate accountability process, role of the auditors with respect to Parmalat scandal. The study will also…
Does the rotation of auditors improve the quality of auditing?
It is worth mentioning that the role of audit rotation in improving the standards and the efficiencies of audit is duly considered as one of the major determinants of audit quality. It is strongly believed that longer tenure of an auditor links with lower quality of audit and in this context, it can be affirmed that the rotation of auditors require to be taken into concern in order to enhance…