...The Role of Power in Financial Statement Fraud Schemes Chad Albrecht • Daniel Holland • Ricardo Malaguen˜o • Simon Dolan • Shay Tzafrir Received: 24 June 2011 / Accepted: 12 December 2013 Springer Science+Business Media Dordrecht 2014 Abstract In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions for future research. Keywords Financial statement fraud Organizational corruption Recruitment Collusion Power and influence Introduction In recent years, fraud and other forms of unethical behavior in organizations have received significant attention in the business ethics literature (Uddin and Gillet 2002; Elias 2002; Rockness and Rockness 2005; Robison and Santore 2011), investment circles (Pujas 2003; Albrecht et al. 2011), and regulator communities (Farber 2005; Ferrell and Ferrell 2011). Scandals at Enron, WorldCom, Xerox, Quest, Tyco, HealthSouth, and other companies created a loss of confidence in the integrity of the American business (Carson 2003) and even...
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...“Discuss the contribution of Actor-Network Theory to our understanding of management accounting and control in organisations that have adopted ERPS technologies.” Over the past decade, management accounting has seen an extraordinary rise in technology driven innovations, whereby Hyvonen (2008) explains how this has contributed to the emergence of virtual organisations. The power of ICT plays a pivotal role in many organisations, through providing a basis for managing efficient operations and formulating corporate strategy. Moreover, Bhimani et al (2008) explains how ICT provides the opportunity to alleviate the problems associated with information flows in organisations with fragmented information systems. In practice, Hyvonen (2008) notes that the centralised control of large organisations requires ICT systems that make the periphery visible to the centre. The enterprise wide resource planning system (ERP System) is an example of an ICT system which coordinates all the resources, activities and corporate information of an organisation into one central database that collects data and feeds it into multiple applications that support all business activities of an organisation. Furthermore, it has been suggested that such systems facilitate unprecedented levels of organisational integration (Dechow and Mouritsen, 2005) and thus ERP systems have provided a new platform for organisations to thrive and develop a competitive advantage. Actor-Network Theory is a constructivist and...
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...The Long Conversation: LEARNING HOW TO MASTER ENTERPRISE SYSTEMS Oswaldo Lorenzo Peter Kawalek Boumediene Ramdani cquiring large-scale Enterprise Systems (ESs) such as SAP or Oracle is typically a huge investment for any firm. The cost of an ES with sophisticated multi-modules can run into the millions of dollars. A study of total costs of ES ownership by the Aberdeen Group reveals that companies with turnovers between $1–$5 billion pay an average of $5,920,785, and companies with turnovers between $50 and 100 million pay an average of $1,081,869 for a complete ES package, which includes the configuration and implementation of software, after-sales service, and maintenance.1 ESs promise much, but are expensive, complex, and threaten the status quo of relationships in an organization. Hence implementation is frequently fraught with difficulties. Change management costs can mount as old systems are discarded or modified, staff is trained, old processes are set aside and new procedures adopted. Subsequently, organizations seek a rapid return on their investment by designing project plans that minimize risk. In the early years, few ES implementations lived up to their expectations and today many organizations continue to struggle to achieve the results expected and desired from ESs. How can companies reach a point where their expectations are met or exceeded? Far from offering a quick fix, or providing a fast track to an order of magnitude improvement, ESs are better understood...
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...CHAPTER 7 IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES CHAPTER OUTLINE | |The Nature of Strategy Implementation | | |Annual Objectives | | |Policies | | |Resource Allocation | | |Managing Conflict | | |Matching Structure with Strategy | | |Restructuring, Reengineering, and E-Engineering | | |Linking Performance and Pay to Strategies | | |Managing Resistance to Change | | |Creating a Strategy-Supportive Culture | | |Production/Operations Concerns When Implementing...
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...QUESTION ONE. Maximisation of shareholders wealth is the main objective of a firm. Given that corporate ownership and control are often separated, is this a realistic goal? Shareholders are the owners of a corporation. The goal of a corporation is to maximise shareholders wealth, which sounds reasonable, since the owners (shareholders) want their company to be profitable. This goal was not an issue when the owners of the corporation were also the managers. However in the present day, corporate ownership has become increasingly diffused and while the shareholders may own the corporation, they do not run it. Rather a board of directors are elected who then appoint managers to oversee the day to day running of the company. This is called a separation of ownership and management and represents one distinctive feature of a corporation. In theory most financial managers would agree with the goal of maximising wealth for the owners of the corporation. In practice however, it could be suggested that managers are also concerned with their personal wealth, job security, lifestyle and other benefits such as golf club memberships, company vehicles and impressive offices all provided at company expense. Such concerns may make managers reluctant or unwilling to make decisions that while it may increase the owner’s wealth, may result in the loss of their job and damage to their personal wealth. This compromise between management’s personal goals and owner maximisation produces a less-than...
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...proportion of independent directors to total number of directors on the board, the existence of a voluntary audit committee, the existence of dominant personalities (CEO/Chairman duality), and the percentage of family members on the board. Using a weighted relative disclosure index for measuring voluntary disclosure, the results indicate that the existence of an audit committee is significantly and positively related to the extent of voluntary disclosure, while the percentage of family members on the board is negatively related to the extent of voluntary disclosure. The study provides empirical evidence to policy makers and regulators in East Asia for implementing the two new board governance requirements on audit committee and family control. © 2001 Elsevier Science Inc. All rights reserved. Keywords: Corporate disclosure; Corporate governance; Voluntary disclosure; Hong Kong 1. Introduction It is commonly agreed that the recent Asian financial crisis was not only the result of a loss in investor confidence but, more importantly, of a lack of effective corporate governance and transparency in many of Asia’s financial markets and individual firms1. Over the last several years, most East Asian economies have been actively reviewing and improving their regulatory frameworks, in particular, corporate...
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...Tw elfth Edition INTERNATIONAL BUSINESS Environments and Operations John D. Daniels University of Miami Lee H. Radebaugh Brigham Young University Daniel P. Sullivan University of Delaware Pearson Education International Contents Preface 29 About the Authors • PART ONE 39 BACKGROUND FOR INTERNATIONAL BUSINESS 44 1 Globalization and International Business 45 49 44 CASE: The Global Playground Introduction 48 W h a t Is International Business7. The Forces Driving Globalization 50 Factors in Increased Globalization 51 What's Wrong with Globalization? 56 Threats to National Sovereignty 56 Economic Growth and Environmental Stress 57 Growing Income Inequality 57 s | Point ^J3ffi^S^^3 ' Offshoring Good Strategy? 58 Why Companies Engage in InternationaLBusiness Expanding Sales 60 , Acquiring Resources 60 Minimizing Risk 60 60 Modes of Operations in International Business Merchandise Exports and Imports 62 Service Exports and Imports 62 Investments 63 Types of International Organizations 63 Why International Business Differs from Domestic Business 64 Physical and Social Factors 65 The Competitive Environment 67 Looking to the Future: 61 Three Ways of Looking at Globalization 68 C A S E : Carnival Cruise Lines: Exploiting a Sea of Global Opportunity 69 74 Summary Key Terms 75 Endnotes 75 An Atlas 78 Map Index 86 Contents • 2 PART TWO COMPARATIVE ENVIRONMENTAL FRAMEWORKS 90 91 90 The Cultural Environments...
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...GARY COKINS, CPIM Analytics-Based Performance Management LLC www.garycokins.com 401 Hogans Valley Way Cary, NC 27513 e-mail: gcokins@garycokins.com _____________________________________________________________________________________ Word count = 2,491 The Obstacle Course for Getting Buy-in for Analytics Why is the adoption rate for applying analytics so slow? Technology is no longer the impediment. It once was, but software capabilities are proven. The barriers involve resistance to change and unfamiliarity. These are social, behavioral, and cultural issues; and few analysts are trained in behavioral change management. What is involved with these barriers, and how can analysts overcome resistance and get organizational buy-in? Organizations that achieve competency with analytics are able to sustain a long-term competitive advantage. Careers sometimes have more to do with luck and circumstances than being smart and competent. I have been fortunate in having luck to meet opportunity. My 1960s high school love for mathematics led to degrees in industrial engineering and operations research at Cornell University and an MBA from Northwestern University’s Kellogg School of Management. After ten years in CFO and operations line manager roles, I enjoyed fifteen years in management consulting on enterprise performance improvement projects with Deloitte, KPMG, and Electronic Data Systems (EDS, now owned by HP). During my consulting years I worked...
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...Seminar – 7 Chapter 7 Financial Responsibility Centers Financial Result Control System Financial Result Control System results are defined in monetary terms, most commonly in terms of accounting measures such as revenues, costs, profits, and returns. Advantages of Financial Result Control System Financial objectives are paramount in for-profit firms. Financial measures provide a “summary” measure of performance by aggregating the effects of a broad range of operating initiatives across a possibly broad range of markets, products, or activities into a single or a few measures. Most financial measures are relatively precise and objective. The cost of implementing financial result controls is often small relative to that of other forms of management control. Types of financial responsibility centers Investment centers Investment centers are responsibility centers whose managers are held accountable for the accounting returns on the investment made to generate those returns. Profit centers Profit centers are responsibility centers whose managers are held accountable for profit which is a measure of the difference between the revenues generated and the costs of generating those revenues. The goal for not-for-profit organization is to break even, or perhaps even incur limited losses. However, for-profit entities is normally not considered desirable to generate higher profits than those budgeted. Two limited forms: When sales-focused entities are made into...
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...2 Strategic management accounting: how far have we come in 25 years? Kim Langfield-Smith Monash University, Melbourne, Australia Abstract Purpose – The purpose of this paper is to provide a review of the origins of strategic management accounting and to assess the extent of adoption and “success” of strategic management accounting (SMA). Design/methodology/approach – Empirical papers which have directly researched SMA and prior review papers of the adoption and implementation of SMA or SMA techniques are reviewed. As well as assessing the extent of adoption of SMA and the reasons underlying an apparent low adoption rate, the role of accountants in adopting and implementing SMA is considered. Finally, the success or otherwise of SMA is discussed. Findings – SMA or SMA techniques have not been adopted widely, nor is the term SMA widely understood or used. However, aspects of SMA have had an impact, influencing the thinking and language of business, and the way in which we undertake various business processes. These issues cut across the wider domain of management, and are not just the province of management accountants. Research limitations/implications – There is limited value in conducting future surveys of the adoption and implementation of SMA or SMA techniques. Rather, the focus should be on how SMA-inspired techniques and processes diffuse into general practice within organizations. Originality/value – Twenty-five years after the term strategic management accounting was...
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...an increasing reliance on tightly-integrated foreign operations, a parallel world of finance has been opened within every multinational firm and this world has, heretofore, been overlooked. The course materials are designed to address the many aspects of financial decision making within global firms prompted by these changes that are not addressed in traditional materials. The paper provides an overview of the structure of the course and its seven modules with particular emphasis on the three modules that constitute the core of the course. The paper also describes an analytical framework that has been developed through the creation of the course materials to guide critical financial decisions on financing, investment, risk management and incentive management within a multinational firm. This framework emphasizes the need to reconcile conflicting forces in order for multinational firms to gain competitive advantage from their internal capital markets. The paper concludes with a discussion of the course's pedagogical approach and detailed descriptions of all the course materials, including 19 case studies, corresponding teaching notes, several module notes and supplementary materials. Mark Veblen, Kathleen Luchs and Claire Gilbert provided excellent research assistance in the process of writing these cases and the course overview note. Seminar participants at the HBS CORE seminar provided particularly helpful comments and...
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...Financial Scandals and the Role of Private Enforcement: The Parmalat Case Law Working Paper N° 40/2005 May 2005 Guido Ferrarini University of Genoa, Centre for Law and Finance and ECGI Paolo Giudici Free University of Bozen and Centre for Law and Finance © Guido Ferrarini and Paolo Giudici 2005. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. This paper can be downloaded without charge from: http://ssrn.com/abstract=730403 www.ecgi.org/wp ECGI Working Paper Series in Law Financial Scandals and the Role of Private Enforcement: The Parmalat Case Working Paper N° 40/2005 May 2005 Guido Ferrarini Paolo Giudici This Working Paper is based upon a draft prepared for the EU Corporate Law Making Conference (Cambridge, October 29-30, 2004) organized by Harvard Law School and the Swiss Federal Institute of Technology (ETH Zurich). The authors are grateful to Gerard Hertig, Mark Roe, Donald Langevoort, and other conference participants for helpful comments. Drafts of this paper were also presented at the Yale Law School Alumni Meeting on October 8-10, 2004; at a meeting of the Associazione Via Isonzo held in Milan on October 10, 2004; and at a seminar at the Institute of Law and Finance (ILF), University of Frankfurt, on January 18, 2005. The authors are grateful to Theodore Baums, Andreas Cahn, Carmine Di Noia, Jon Macey,...
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...Handbook of Management Accounting Research Volume 3 Edited by CHRISTOPHER S. CHAPMAN Imperial College London, UK ANTHONY G. HOPWOOD University of Oxford, UK MICHAEL D. SHIELDS Michigan State University, USA AMSTERDAM – BOSTON – HEIDELBERG – LONDON – NEW YORK – OXFORD PARIS – SAN DIEGO – SAN FRANCISCO – SINGAPORE – SYDNEY – TOKYO Elsevier The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, UK First edition 2009 Copyright © 2009 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone ( 44) (0) 1865 843830; fax ( 44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively visit the Science and Technology Books website at www.elsevierdirect.com/rights for further information Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for...
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...shoes Table of content Executive Summary……………………………………………………….3 Background and Introduction...................................................................... 5 The Vision Statement................................................................................. 6 The mission statement.................................................................................. 7 Organization Culture and core values...........................................................7 The Leadership....………………………………….………………………9 HR Requirements and Team……..…………….………………………… 11 Possible challenges. …………………………………………………..… 13 Marketing Mix…………………………………………………………….17 SWOT Analysis..………………………………………………….…….. 20 PEST Analysis…………………………………………………………... 21 Product Analysis and Function………………………………………….. 23 Financial Planning……………………………………………………….. 28 Business Model …………………………………………………………… 41 Conclusion………………………………………………………………….42 Reference ………………………………………………………………….43 Executive Summary Global Fashion & Designer Shoes (GFDS) is a shoe company that is originated and located in the United States. It is a newly formed footwear and apparel company that is designed to take the footwear industry to a whole new level. The target market for the company is men, women and young people. Some of brand name products include men’s dress shoes, women’s dress shoes, Sports and casual shoes such as Nike, Adidas, New Balance, Reebok, Sketchers, US Polo, Jordan, Pumas, Kenneth...
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...pagefiles: Management Challenges Business Applications Module I Development Processes Information Technologies Foundation Concepts FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS Ch apt er Highligh t s L ea r n i n g O bj ect i v e s Section I Foundation Concepts: Information Systems in Business 1. Understand the concept of a system and how it relates to information systems. 2. Explain why knowledge of information systems is important for business professionals, and identify five areas of information systems knowledge that they need. 3. Give examples to illustrate how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage. 4. Provide examples of several major types of information systems from your experiences with business organizations in the real world. 5. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business. 6. Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products. 7. Demonstrate familiarity with the myriad of career opportunities in information systems. The Real World...
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