...SEC's role in managing financial governance? Do you think that businesses are more ethical after the passing of the Sarbanes Oxley Act? What examples are there to support you answer? “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation (Commission, 2013).” According to the web site, the SEC requires public companies to disclose meaningful financial and other information to the public. This allows investors to be educated and judge for themselves whether or not to purchase, sell or keep a particular security. The SEC also oversees participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. This helps them to maintain fair dealing and protect against fraud. It has an enforcement arm which brings civil enforcement actions against individuals and companies for the violation of the securities laws. This would include insider trading, accounting fraud, providing false or misleading information, etc. The Sarbanes Oxley Act augments the SEC by mandating reform to “enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud (Commission, 2013),” and it created the Public Company Accounting Oversight Board to oversee the activities of the auditing profession. Judging by the continued sanctions being brought against companies, it does not seem...
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...Case Study: Raising Capital in Switzerland Angel PinaHardin ACCU 615 July 10, 2013 Brandman University Case Study: Raising Capital in Switzerland E-Centives Inc. is a company based in Bethesda, Maryland with offices in Redwood City, New York and Los Angeles. The company is a leading on-line direct marketing company 4.4--million account members (Choi & Meek, 2011). The organization wants to expand into foreign markets and considers the Swiss Exchange to help meet its financial needs. Introduction This paper will discuss the case study of organization e-Centives Inc. In particular, it will discuss the factors that are relevant to e-Centives Inc.’s decision to raise capital and list on the Swiss Exchange’s New Market. It will also discuss why e-Centives chose not to raise public equity in the United States and their decision not to raise capital on the U. S. Stock exchange as well as the advantages and disadvantages of using the U. S Generally Accepted Accounting Principles (GAAP). Also discussed will be the requirement for e-Centives Inc. to prepare its financial statements using Swiss accounting standards as well as the reporting requirements and whether or not e-Centives met those requirements. Factors to the Swiss Exchange Many factors contributed to e-Centives Inc.’s decision to enter the Swiss Exchange instead of the U. S Stock Exchange. These factors include ease and availability of capital and investors, reputation of the exchange, and corporate profile...
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...SEC's role in managing financial governance? Do you think that businesses are more ethical after the passing of the Sarbanes Oxley Act? What examples are there to support you answer? “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation (Commission, 2013).” According to the web site, the SEC requires public companies to disclose meaningful financial and other information to the public. This allows investors to be educated and judge for themselves whether or not to purchase, sell or keep a particular security. The SEC also oversees participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. This helps them to maintain fair dealing and protect against fraud. It has an enforcement arm which brings civil enforcement actions against individuals and companies for the violation of the securities laws. This would include insider trading, accounting fraud, providing false or misleading information, etc. The Sarbanes Oxley Act augments the SEC by mandating reform to “enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud (Commission, 2013),” and it created the Public Company Accounting Oversight Board to oversee the activities of the auditing profession. Judging by the continued sanctions being brought against companies, it does not seem...
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...Economic Research Economic Briefing Germany: Analysts’ concerns are growing The ZEW Index for Germany tumbled again in October. Poorer economic data and a far from solved debt crisis are making analysts more skeptical about the future. How companies view the situation is more important though. This will be revealed by the Ifo business climate on Friday, which is also set to fall again. Financial analysts give an increasingly negative assessment of the outlook for the German economy. The ZEW index for the economic expectations in Germany dropped again in October. At -48.3, it came in slightly below expectations (Commerzbank forecast and consensus: -45.0). Well over half of the analysts surveyed meanwhile believe that the economic situation in Germany will deteriorate in the next six months. That said, Germany is the only country for which the index for the current situation is still clearly in positive territory, at 38.4. For the euro zone and the other surveyed countries, the figure is already in deep negative territory. These figures do not really bring much news; the fact that analysts have reduced their growth estimates again for next year – meaning they assess the outlook less favourably – is already in the newspapers. Furthermore, a look at the markets shows that the sovereign debt crisis is causing unrest on the financial markets (and therefore among the analysts working in this sector). What is more surprising is that 8% of those asked still anticipate an improvement...
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...Introduction With the Global Financial Crisis came the search for answers as to what led to the meltdown in the United States mortgage market and ultimately the rest of the world economy. Speculation was rife that accounting standards, in particular, fair value accounting was the prime reason for this significant meltdown. “This sparked a fierce debate with some experts believing that fair value accounting was primary cause of the crisis whilst others considered that it exacerbated it. On the other side of the debate were those commentators that believed that fair value accounting was successful in acting as an early warning system and effectively prevented more calamitous consequences.” (Pabuccu, 2011) In response to this speculation, the International Accounting Standards Board (IASB) and the Australian Accounting Standards Board (AASB) immediately took action to review this matter and implement the necessary changes to address the uncertainty surrounding Fair Value accounting. Body Due to the economic significance of the crisis, financial commentators around the world analysed the situation, made comment, pointed the finger; and laid blame for this event. Due to the speculation, a ferocious debate commenced, with many of them believing that fair-value accounting was the primary cause of this event. Bubbles and Busts have occurred throughout history and are closely linked to the periods preceding a financial crisis. According to McMahon (2011), “fair-value accounting...
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...Arthur Gharakhanian Adelphia (A) ACCU-620 Brandman University Week 3, Assignment 1 November 7th, 2012 Adelphia Introduction Founded in 1952 by John Rigas, Adelphia Communications Corporation was a "family" business. John Rigas (father) was the chairman and CEO, Tim Rigas (son) served on the board and was the CFO, and Michael Rigas (son) was EVP and a board member along with James Rigas (son) (USA Today, 2004). Together they owned the majority of Adelphia's stock and occupied the majority of the seats on the board. These two components would be key in the fraud that would ensue. The personal lives of the Rigas’ would be the root cause of their need for cash and the reason behind the fraud they would commit (USA Today, 2004). The Scandal The government described it as ''one of the most extensive financial frauds ever to take place at a public company" (Sorkin, 2004). The Rigas' used company money to construct a private golf course, own several private jets, and purchase multiple several luxury homes. They were able to do this by establishing "complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves" (AP, 2005). In order to keep investment money flowing in, they would manipulate the books to meet analyst expectations, thus inflating the stock price and at times they would mix Adelphia's funds with their own private funds. Upon realizing the amount of funds...
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...frauds, which led to the Sarbanes-Oxley Act of 2002. Previous regulations were efficient to a certain extent, but scandals still happened and more regulation seemed to always be needed. Even though the new SOX regulation seems powerful and efficient, I believe that there will always be a need for additional regulation in order to prevent future scandals. Securities Acts of 1933 and 1934 Summary of Regulation The stock market crash of 1929 resulted in the Securities Act of 1933. This act required that before a company an offer or sell securities in a public offering, they must register the securities with the Securities and Exchange Commission (SEC). The registration statement is used to notify the SEC that a sale of securities is pending and that the information needs to be disclosed to prospective buyers. This statement includes information about the issuer and its business, a description of the stock, the proposed use of the proceeds from the offering, and audited balance sheets and income statements. This registration process ensures that buyers of the security have accurate and complete information about the security before they decide to invest in it. Even though the SEC requires all of this information, they do not investigate the quality of the...
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...Oak Industries, Inc. Case – sample answer 1. Is it unethical for a company to intentionally understate its earnings? Why or why not? Yes, it is clearly unethical to intentionally understate earnings since the management makes representations that the financial statements are complete and accurate. It is obvious that intentionally understating earnings is done to allow the company to later overstate earnings by using falsified reserves to cover the inadequate current period earnings. These manipulations and misrepresentations do not allow fair comparisons of the results of operations between years. In this case the misrepresentation gave a totally false picture of the success of its subscription television systems and interfered with the ability of users to correctly analyze the financial information of the firm. These misrepresentations impaired the decision-making ability of the financial statement users and defeated the purpose of financial statements presenting a true and accurate picture of the company. 2. Should auditors be equally concerned with potential understatements and potential overstatements of a client’s revenues and expenses? Identify audit techniques that may be particularly helpful in uncovering understatements of revenues and overstatements of expenses. Auditors are required to plan and perform an audit to obtain reasonable assurance that the client’s financial statements are free of material misstatements. These misstatements...
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...REPORT OF INVESTIGATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION OFFICE OF INSPECTOR GENERAL Case No. OIG-509 Investigation of Failure of the SEC To Uncover Bernard Madoff's Ponzi Scheme Executive Summary The OIG investigation did not find evidence that any SEC personnel who worked on an SEC examination or investigation of Bernard L. Madoff Investment Securities, LLC (BMIS) had any financial or other inappropriate connection with Bernard Madoff or the Madoff family that influenced the conduct of their examination or investigatory work. The OIG also did not find that former SEC Assistant Director Eric Swanson's romantic relationship with Bernard Madoffs niece, Shana Madoff, influenced the conduct of the SEC examinations of Madoff and his firm. We also did not find that senior officials at the SEC directly attempted to influence examinations or investigations of Madoff or the Madofffirm, nor was there evidence any senior SEC official interfered with the staffs ability to perform its work. The OIG investigation did find, however, that the SEC received more than ample information in the form of detailed and substantive complaints over the years to warrant a thorough and comprehensive examination and/or investigation of Bernard Madoff and BMIS for operating a Ponzi scheme, and that despite three examinations and two investigations being conducted, a thorough and competent investigation or examination was never performed. The OIG found that between June 1992 and December...
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...than what they were he was able to roll out the red carpet of capital promises and people came running to be included at the party. Mr. Madoff was certainly an equal opportunity crook, he took advantage of everyone, and the only prerequisite was to have money. Influential people from all walks of life found themselves mesmerized by “Uncle Bernie” and invested millions of dollars, failing to remember the old adage, “if it walks like a duck, if it quacks like a duck, then it’s probably a duck!” Describe three types of illegal business behavior alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business. The first unethical and illegal behavior of Mr. Madoff is securities fraud....
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...be signed off by the CEO and CFO of the company. Executives will be held responsible for any accounting irregularities by signing authentic documentation they are fully aware of the accounting rules and regulations and that they will be held accountable for any simple inept errors or deliberate fraud, reckless breach of fiduciary duty, blatant negligence, scheming to defraud, and so on. The SOX act has made CEO’s and CFO’s more responsible, thus, they (CEO’s and CFO’s) must certify that they have reviewed the financial statements of the company and that the statements are true to the best of their knowledge. Section 302 (management assessment of disclosure controls) requires disclosure of material information to the Securities & Exchange Commission (SEC). Section 401 (disclosures in periodic reports) of the Sarbanes Oxley Act has made it mandatory for companies to disclose their off balance sheet financial arrangements unlike previous practices in which certain leases of...
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...Securities, Commodities, and Financial Services Sales Agents Significant Points • Most positions require a bachelor’s degree in busi- • Applicants face keen competition for jobs, especially • Turnover is high for newcomers, but those who are successful have a very strong attachment to their occupation because of high earnings and considerable investment in training. in investment banks. ness, finance, accounting, or economics; a master’s degree in business or professional certification is helpful for advancement. Nature of the Work Each day, hundreds of billions of dollars change hands on the major United States securities exchanges. This money is used to invest in securities, such as stocks, bonds, or mutual funds, which are bought and sold by large institutional investors, mutual funds, pension plans, and the general public. Most securities trades are arranged through securities, commodities, and financial services sales agents, whether they are between individuals with a few hundred dollars or large institutions with hundreds of millions of dollars. The duties of sales agents vary greatly depending on their specialty. The most common type of securities sales agent is called a broker or stock broker. Stock brokers advise everyday people, or retail investors, on appropriate investments based on their needs and financial ability. Once the client and broker agree on the best investment, the broker electronically...
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...Jennifer Thell LS311: Business Law Unit 9: Assignment 2/15/2012 Merging two companies can affect the income, expenses, and the stock of the newly formed company. To ensure that the merger will not create an unfair advantage on the market the government created rules under the Securities and Exchange Commission. They regulate how and which companies can complete their mergers. The intent is to prevent companies from creating monopolies and eliminate any type of competition. For the merger between Reliant and Gasworks, registration with the SEC would be a requirement. A registration includes the securities being offered, all the properties of a company, all management details, how the proceeds of a sale are used, and any risks involved. (Miller and Jentz. 2008.) The merger is the combination of two companies where one is buying out another. Due to one of the companies being sold, the registration will be needed. Emerson has violated the rules of the SEC. He had information that was not yet released to the public about the possibility of a valuable increase in the stock. Emerson may not have intentionally release this information, but did so none the less. He could be found guilty of insider trading because of his statement. Wallace used the information of the upcoming trade that he learned of through Emerson to profit. Knowing that this information was not yet public, he is guilty of insider trading. He bought the stock based on his knowledge while it was priced low...
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...Caltron Case University of Phoenix ACC/541 Accounting Theory and Research Week 5 Marina Layvand 21 July 2008 To: Caltron Computers, Inc. From: Peale, Gower and Quill Date: 21 July 2008 Subject: Revenue Recognition Issues There are many different sources for rules and regulations coming from different accounting boards. They are created to ensure every company reports their financial statements properly and that each transaction is in accordance with the generally accepted accounting principles (GAAP). Peale, Gower and Quill have been designated auditors for Caltron Computers, Inc. and have questioned four transactions regarding revenue recognition. These transactions will have an impact on the 2008 report earnings and the proposed secondary public stock offering in February 2009. To alleviate the concerns of auditors and reviewers of Caltron’s financial statements, recommendations have been made to amend the transactions in accordance with the associated accounting pronouncements. Caltron’s revenue recognition policy has been to recognize each transaction that occurs despite any stipulations included in the transaction. Peale, Gower and Quill have been assigned to discuss the implications of recording these transactions and the effect on the earnings. The earnings are not recorded properly because some of the transactions currently in place are not in accordance with SEC standards. The revenue recognition policy is to record every sale that occurs...
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...Form 20-F 2011 Nokia Form 20-F 2011 As filed with the Securities and Exchange Commission on March 8, 2012. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 Commission file number 1-13202 (Exact name of Registrant as specified in its charter) Republic of Finland (Jurisdiction of incorporation) Nokia Corporation Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Address of principal executive offices) Riikka Tieaho, Director, Corporate Legal, Telephone: +358 (0)7 1800-8000, Facsimile: +358 (0) 7 1803-8503 Keilalahdentie 4, P.O. Box 226, FI-00045 NOKIA GROUP, Espoo, Finland (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”): Title of each class Name of each exchange on which registered American Depositary Shares Shares (1) New York Stock Exchange New York Stock Exchange(1) Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission. Securities registered pursuant to Section 12(g) of the Exchange Act: None Securities for which there is a reporting obligation pursuant to Section 15(d)...
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