...Learning Team Reflection - The Demise of Arthur Anderson Team A: Alex Raye, Chai Gallahun, Frank Hagan, and Leonard Hollomon FIN 571 December 14, 2015 Dr. Robert Mayfield Learning Team Reflection - The Demise of Arthur Anderson Business ethics set a standard for businesses to conduct their affairs with internal and external stakeholders. Corporate ethics allows individuals to scrutinize and self-correct the ethical values and morals of a business. The purpose of this paper is to discuss the mistakes detailed in the Ethics case, “The Demise of Arthur Anderson” and identify the potential actions that leadership could have taken to prevent this organizational failure. The firm committed several errors that could have been prevented through adherence to established ethics and practices. A major accounting firm since 1918, it has become a sad ending for a once powerful corporation. During the 1980’s, changes in business required many organizations to branch out and diversify their business capabilities. Arthur Anderson was no exception to this having operated an accounting practice for some time, they branched out to grow their consulting practice. Many times, these services intertwined and created a conflict of interest that affected their decisions when auditing so not to upset the delicate balance while keeping their businesses growing. At times, the choices that were made where unethical and violated guidelines put in place to prevent accounting scandals. These practices...
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...itself suggests that it is an ethical approach which “depends on the consequences”. This view is also sometimes referred to as teleology (from the Greek word telos which means goal). Ethics is a branch of Philosophy that examines ethical concepts and issues. It inquiries into such things as goodness, right action, and moral responsibility. It answers the question, “What do I do?" It is the study of right and wrong in human endeavours. At a more fundamental level, it is the method by which we categorize our values and pursue them. Do we pursue our own happiness, or do we sacrifice ourselves to a greater cause? A proper foundation of ethics requires a standard of value to which all goals and actions can be compared to. Consequentialism, as its name suggests, is the view that normative properties depend only on consequences. This general approach can be applied at different levels to different normative properties of different kinds of things, but the most prominent example is consequentialism about the moral rightness of acts, which holds that whether an act is morally right depends only on the consequences of that act or of something related to that act, such as the motive behind the act or a general rule requiring acts of the same kind. Two people who figure large in any discussion of ethics are Jeremy Bentham and Immanuel Kant. Bentham, along with J S Mill, is the founder of a movement known as Utilitarianism and both have also significantly influenced economic thought. In...
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...Accounting and the Public Interest While this concept of public interest is imperative to the accounting profession, it is not always well understood. According to reflections by Dellaportas and Davenport (2007), serving the public interest in the accounting field is done on two levels. The first, individual professional judgment, relates to how accountants apply expertise to achieve excellence in the provision of services. Excellence in this capacity refers to integrity, objectivity, independence, confidentiality, adherence to technical and professional standards, competence and due care, and general ethical behavior (Dellaportas, 2007). The second, institutional processes, refers to professional accounting bodies that develop processes which produce high-quality standards intended to benefit end-users of financial reports (Dellaportas, 2007). By developing value on the individual level and fostering an environment in which that value may thrive, public accounting can meet the needs of public interest. Whether or not the needs of the public interest align with those of the private interest is up for debate. According to Lee Parker (1994), “private interest can be defined as the latent motivation of ethical codes to protect the interests of the professional accounting body corporate and its individual members.” Such interests include political power, social status, and influence (Parker, 1994). In order to preserve these self-interests, it is necessary to fulfill the public...
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...Learning Team C Week 2 Reflection FIN 571 January 20, 2014 David Binder Learning Team C Week 2 Reflection “Power tends to corrupt and absolute power corrupts absolutely.” – Lord Acton Mission, vision, and goals provide a professional and moral compass for corporations. In the case of Arthur Andersen’s decent, compromises were made that in the end destined the accounting firm to cease to exist (Parrino, Kidwell, & Bates, 2012, Ethics Case). The learning team’s discussion surrounded the blatant conflict of interest, greed and the breach of fiduciary duties of the firm to provide objective evaluation of its accounting practices and independence from its clients. Greed Joe and Jeffery pointed in there reflections the change of the market during the 1980’s resulted in a boom of mergers and acquisitions, and additionally the consulting practice of the firm experienced an extreme growth. Andersen partners began realizing the potential in profits from consulting contracts as companies were on a spending spree. Eventually, its auditing services was no longer the main source of revenue for the firm Soon tension started between the two groups which lead to some of the auditors forming their own auditing firm. Auditors remaining with Anderson were now forced to sell consulting services to clients to gain market share in the consulting business through their audit clients. This and other tactics was the first of many decisions that contributed to unethical business...
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...STR 581 Entire Course For more classes visit www.snaptutorial.com STR 581 Week 1 Individual Assignment Ethics Reflection Paper STR 581 Week 1 DQ 1 STR 581 Week 1 DQ 2 STR 581 Week 1 Knowledge Check STR 581 Week 2 Learning Team Activity (Innovation Strategy) STR 581 Week 2 Individual Assignment Research Proposal STR 581 Week 2 DQ 1 STR 581 Week 2 DQ 2 STR 581 Week 2 Knowledge Check STR 581 Week 3 Individual Assignment External and Internal Environmental Analysis STR 581 Week 3 Learning Team Peer Evaluation STR 581 Week 3 Knowledge Check STR 581 Week 3 DQ 1 STR 581 Week 3 DQ 2 STR 581 Week 4 Individual Assignment Strategic Choice and Evaluation STR 581 Week 4 Learning Team Peer Evaluation STR 581 Week 4 Knowledge Check STR 581 Week 4 DQ 1 STR 581 Week 4 DQ 2 STR 581 Week 5 Individual Assignment Implementation, Strategic Controls, and Contingency Plans STR 581 Week 5 Learning Team Peer Evaluation STR 581 Week 5 Knowledge Check STR 581 Week 5 DQ 1 -------------------------------------------------------------------------------- STR 581 Week 1 DQ 1 For more classes visit www.snaptutorial.com What are the major components of a strategic management process? Which of these components is the most difficult for managers to perform? Explain your answer. -------------------------------------------------------------------- STR 581 Week 1 DQ 2 For more classes visit www.snaptutorial.com Where have you seen organizational mission, vision, and values statements...
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...my own work and creation and it has been prepared solely for credit in this class, and that this review, including the “main issue of the article” section has been written in my own words.” Article Citation Pendse, S. (2012). Ethical Hazards: A Motive, Means, and Opportunity Approach to Curbing Corporate Unethical Behavior. Journal Of Business Ethics, 107(3), 265-279. doi:10.1007/s10551-011-1037-0. Retrieved from http://ezproxy.bellevue.edu:80/login?url=http://search.proquest.com/docview/1523896341?accountid=28125 Main issue of the article This paper is about unethical business behavior and the factors that can encourage one to participate in it. Ethics refers to standards of wrong or right in relation to responsibilities, benefits or obligations to others and society in general. They set standards or guidelines for acceptable beliefs and interactional behavior. The Enron, WorldCom and Tyco financial debacles devastated many investors and employees and brought a lot of unwanted attention and questions about business ethics. The improprieties in their accounting books revealed to the world the crooked unethical accounting practices practiced by some seeming reputable organizations. Wondering why the Enron and WorldCom executives got involved in the scandal, the author of this article asserts that “a conjunction of motive, means, and opportunity creates ‘an ethical hazard’making questionable executive decisions more probable” (Pendse 2012). He continues to conclude that...
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...Learning Team Reflection: Week 2 March 4, 2015 Jean Goodman Learning Team Reflection: Week 2 Arthur Anderson was a leading accounting firm in 2002 and the organization was destroyed that same year A number of mistakes were made by Arthur Andersen leading to the failure of the organization; these were portrayed in the case, “A Sad Tale: The Demise of Arthur Anderson”. Arthur Anderson became commonly known for the motto “Think Straight and Talk Straight” (Parrino, Kidwell, & Bates, 2012). This motto served as an ethical guideline for the organization. Mistakes Made within the Organization Arthur Andersen quickly fell victim to accounting scandals within the accounting practice. The first mistake made within the organization was due to financial conflicts between the auditing department and the consulting department. Some of the consulting clients were also auditing clients and when the consulting departments profits exceeded the auditing departments profits, this created a conflict of interest. Maintaining the separation between these departments and the funds would have alleviated this issue. Another mistake made by the organization was the unethical act of forcing auditors to sell consulting contracts to their clients. This led to the largest mistake of reporting false information; the SEC charged Arthur Andersen with obstruction of justice, as the organization was found guilty of falsifying documents relating to Enron’s financial records. Actions to Prevent...
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...Ethical risks and threats in the accounting profession Accounting ethics is primarily the study of moral values and judgments as they apply to accountancy. Accounting ethics were first introduced by Luca Pacioli in 1494 in his book “Summa de arithmetica, geometria, proportioni, et proportinalita”, and later expanded by government bodies, professional organizations and independent companies (Humphrey 2005). Throughout 2001 and 2002, the financial scandals in in the USA and some other countries, such as Australia, dramatically demonstrated how the efficiency of financial markets is based on assumptions of trust and ethical behavior of corporate managers (McPhail 2001). The collapse of companies such as Enron, WorldCom and Global Crossing in the USA, HIH Insurance and OneTel in Australia, and Parmalat in Italy, has led to a loss of confidence by the investing public in the system of financial reporting and accountability. The globalization and diversification of accounting services, combined with market competition and high profile corporate collapses has drawn attention to the accounting profession and its perceived ethical standards. (Cooper 2007) Ethical values provide the foundation on which a civilized society exists. Without the foundation, civilization collapses. On a personal level, the answer to the question of the highest aspiration might be wealth, fame, knowledge, popularity, or integrity. But if integrity is secondary to any of the alternatives, it will be sacrificed...
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...PERSONAL REFLECTION JOURNAL BACC7161/4135 The goal of teaching a course that pertains to values, ethics, social justice can be realized by getting students to reflect on who they are, what theirr values happen to be, and how they compare with the values of business and accounting professions. One can learn about rules and regulations but acting according to them or even challenging them at times depends on your personality and intellect. This is the reason for including this assignment as a part of the course requirements. This assignment is driven by a desire to make students be more reflective, about the material taught in the course and about themselves. As described by a wise person: an unexamined life is not likely to be worthwhile! Since accounting is not so much about counting as it is about accountability, it is important to not limit it to just the “generally accepted accounting principles,” but also to understand how those principles are implemented and how they impact global commerce as well as human lives for better or worse. This part of the course is largely modeled on a model used at St Thomas University in St, Paul, MN. They in turn have relied on other traditions such as Jesuit Examen that seek to use self-reflection as a major instrument in the development of one’s person and identity. I am also uploading an example of how such Examen has been adapted to suit the needs and work done by organizational managers/leaders in 21st century.. Given that...
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...Reflection Paper For Workshop One Angela R Draper Business Ethics – Bus307 7/16/2013 Business Ethics in the workplace is vital to the success of any company whether in regards to the short-run operations or long-term profits. Ethics are about making choices that may not always feel good or seem like they benefit the company. On any occasions you have heard the sayings: don’t hurt, don’t steal, don’t lie, and a popular one do unto others as you would have done to you. These sayings can play a vital role in obtaining ethical values within any company. When a company sets up the guidelines for ethical values it must take in consideration the attitude it wants to betray within the company. Ethics are thought of by many people as something that is related to the private side of life and not to the business side. However, ethics have every bit as much a place in the public as they do in private. Once the foundation is set and this is the environment of the workplace there would be a different outcome within the company. Ethical values cover all aspects of business conduct, regardless of the type of business they are. This would include the treatment of employees, treatment of suppliers and vendors, accounting practices, and the corporate vision including the strategy of the company. A company that set ups ethical values within the company there are expectations from each employee. Therefore you will attract employees that are like minded...
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...assets. (Arens/Elder/Beasley, 2012) ©2012 Prentice Hall Business Publishing, Auditing 14/e, Arens/Elder/Beasley At the types of fraud, usually the Management fraud are including fraudulent financial reporting and the misappropriation of assets. Why the company will occurs the fraud, because the employees and managers have incentive, opportunities and attitude. The fraud specific fraud risk area are including revenue and accounts receivable fraud risk, inventory, purchases and other area Management fraud Management fraud, as the name suggests, is perpetrated by the top management of a company who has the intention of misleading investors (Dutta, 2013). Usually management fraud by accounting manipulation and misstates the...
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...Assessment Cover Sheet (Print all details and attach to front of assessment task/assignment before submitting) Name | ------------------------------------------------- Fatih Budak | Student ID | ------------------------------------------------- s1421411 | Phone number | ------------------------------------------------- 0412156758 | Email | ------------------------------------------------- s1421411@nmitstudent.vic.edu.au | Course code & name | ------------------------------------------------- Associate Degree of Accounting | Unit code & name | BACC202 - Risk management corporate governance and ethics - S1, 2015 | Name of assessment | ------------------------------------------------- Assignment 1 | Due Date | 27/03/2015 (Submission after the due date is subject to penalty) | Teacher name | ------------------------------------------------- Shirley Wong | Instructions | ------------------------------------------------- | Declaration: Read, tick and sign below * I declare that the attached assessment I have submitted is my own original work and any contributions from and references to other authors are clearly acknowledged and noted. * This document has been created for the purpose of this assessment only and has not been submitted as another form of assessment at Melbourne Polytechnic or any other tertiary institute. * I have retained a copy of this work for my reference in the event that this application is lost or damaged...
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...Guillermo Furniture Store Student Name Accounting/561 January 17, 2011 Professor Name Guillermo Furniture Store Guillermo has built a successful empire in the furniture business in the beautiful city of Sonora, Mexico. The reason behind his success is due to a large supply of timber that is available to him for producing a variety of tables and chairs. Furthermore, the labor costs for producing his furniture is relatively inexpensive, therefore, he is able to offer high quality furniture. It was smooth sailing for Guillermo’s business until the occurrence of two major events that changed everything. First, a competitor from overseas entered the furniture market offering rock bottom prices for furniture that is produced by a computer-controlled laser lathe to produce exact cuts in the wood. Second, the city of Sonora is suddenly experiencing a high influx of people due to what the city has to offer – beautiful scenery, no traffic, a new international airport, affordable housing, favorable weather, and lots of development. Competition and an increase in people and jobs resulted in a substantial increase in labor costs. Because of these unforeseen circumstances, Guillermo’s business suffers a lost in profit margins. With the occurrence of these sudden challenges, Guillermo must evaluate the situation and come up with the best possible solution so that his business will not only survive, but continue to flourish as it once did. He has a couple of options...
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...Conviction Enron, an American energy company based in Texas, was named by Fortune as “America’s Most Innovative Company” for six years in a row, with revenues of approximately $111 billion. However in 2001, Sherron Watkins, Enron’s finance executive, discussed her concerns about the company’s financial and accounting irregularities with its CEO, Kenneth Lay but was later asked to ignore the issue along with its auditor, Arthur Andersen. Andersen, who was later convicted, turned the other cheek while Watkins, “the whistle blower”, did not. In the same year, the “Enron scandal” was born. The scandal was disclosed to the public and has become, since then, the epitome of corruption and corporate fraud. Additionally, Enron was cited as “the biggest audit failure” ever. The former Enron CEO along with four Merrill Lynch & Corporation directors were convicted by a jury for accounting fraud while Arthur Andersen was found guilty in a U.S. District Court for illegally destroying documents related to the investigation. Moreover, the court found them guilty of hiding billions of dollars in debt from failed projects and deals along with willful fraudulent behaviors. Ethics Greed is not illegal but it can drive a corporation to commit wrongful doings and eventually crimes. The driving factor in Enron’s case was greed amongst others. Businessmen, regardless of their position in the hierarchy, should not seek for personal gain at the expense of shareholders, as seen on Enron’s...
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...Learning Team Reflection Amin Vohra, Michael D. Thomas, Ryan McCullum, Joe Nguyen, Shantel Singh LAW/531 February 8th, 2012 Mr. James Blevins Learning Team Reflection This learning team reflection will discuss the compliance issues associated with the Foreign Corrupt Practice Act of 1977 (FCPA). What is Foreign Corrupt Practice Act? For those who don’t know might ask, well, the Foreign Corrupt Practice Act of 1977 which was introduced in the U.S Senate as S.303 by Mr. William Proxmire (D.W) and signed into law by president Jimmy Carter on December 19, 1977 is a United States Federal Law known primarily for two of its main provisions. One that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another one concerning bribery of foreign officials. The anti-bribery provision of the FCPA prohibits any person from making use of interstate commerce corruptly, in furtherance of an offer or payment of anything of value to a foreign official, Foreign Political Party, or Candidate for political office, for the purpose of influencing any act of that foreign official in violation of the duty of that of that official, or to secure any improper advantage in order to obtain or retain business. ("Wikipedia") The “Foreign Corrupt Practice Act” protects “American Values” it shields us from the rampant corrupt practices around the world. It holds us to the highest standards of ethics. As the U.S corporations venture into foreign markets they...
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