...http://0-www.lexisnexis.com.library.ggu.edu/lnacui2api/delivery/Print... 1 of 1 DOCUMENT MATTCO FORGE, INC., Plaintiff and Respondent; MATEO MINGUEZ, Plaintiff and Appellant, v. ARTHUR YOUNG & COMPANY et al., Defendants and Appellants. No. B087488. COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION THREE 52 Cal. App. 4th 820; 60 Cal. Rptr. 2d 780; 1997 Cal. App. LEXIS 89; 97 Cal. Daily Op. Service 948; 97 Daily Journal DAR 1354 February 7, 1997, Decided SUBSEQUENT HISTORY: [***1] The Name of this Case has been Corrected February 26, 1997. Review Denied April 30, 1997, Reported at: 1997 Cal. LEXIS 2448. PRIOR HISTORY: APPEAL from a judgment of the Superior Court of Los Angeles County. Super. Ct. No. C731746. Dion G. Morrow, Judge. DISPOSITION: The judgment is reversed as to Mattco's award of damages, except the portion that awarded Mattco out-ofpocket-expenses and interest thereon, which is affirmed. CASE SUMMARY: PROCEDURAL POSTURE: Appellant accounting firm sought review of the judgment from the Superior Court of Los Angeles County (California), which found in favor of respondent client in jury verdicts on respondent's malpractice action following the trial court's ruling that to establish liability and damages respondent needed to show only that appellant caused respondent to suffer harm and that respondent's underlying action had value. OVERVIEW: Respondent client filed a malpractice suit against appellant accounting firm, alleging...
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...Contrary to some belief, accounting is not a “walk-in-the-park” career. Accountants do not sit at a desk one-hundred percent of the time crunching numbers that always add up perfectly. In fact, accounting fraud is one of the largest scandals found today. When an accountant enters an engagement with a client, who are they liable to? Certainly not just to the client, but also anyone who could negatively be affected by a material misstatement, as well as the government. These responsibilities are not easily assumed, nor are they equally distributed. Accountants assume a large responsibility to their clients. They enter a contractual agreement through an engagement letter, and use engagement letters to minimize the risk they assume under the contract. Many engagement letters include memos limiting the recovery. (Reinstein, Lobingier, & Green, 2009) Accountants expressly agree to do a project by a specific date, and imply that the work will be completed carefully. If an accountant breaches the contract, they can be found liable for damages. If it can be found that an accountant did not act with skill and competence, causing harm to their client, negligence can be proved. Accountants also may be found guilty of fraud. Fraud can be proved if an accountant makes a false statement, knowing it is false, and the client relies on the information, resulting in damages. Another liability to the client is the trust clients give their accountants. They are liable to keep the...
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...Arthur Andersen: Questionable Accounting Practices Steven Young Strayer University Business Ethics: Ethical Decision Making and Cases Dr. Mary Tranquillo November 13, 2012 Arthur Andersen: Questionable Accounting Practices p1 Arthur Andersen, one of the largest accounting firms in the United States, “a name that was synonymous with trust, integrity, and ethics” (Ferrell, Fraedrich, & Ferrell, 2011, p. 348), through a loss of its founder Arthur Andersen, and change in its corporate culture resulting in many unethical business transactions that affected multitudes of primary stakeholders had to close its doors in 2002 after 90 years of business. Review the mandated requirements for legal compliance (from chapter 4) and determine which requirements apply to the Arthur Andersen case. Explain your rationale After re-reading Chapter 4 there are five areas that separate the mandated requirements for legal compliance, and I feel the that two apply to the Arthur Andersen case; the protection of consumers, and incentives to encourage organizational compliance programs. In the laws that protect consumers they require businesses to provide accurate information protecting them from financial scams, unfair, fraudulent, or deceptive practices. There are “Gatekeepers” that are in charge of that such as lawyers, financial rating agencies, and financial reporting services that help enforce high ethical standards. This...
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...Franklin D. Roosevelt” by President George W. Bush when he signed it into law. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the law. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco, WorldCom and Arthur Andersen LLP. These scandals cost investors billions of dollars when the share prices of affected companies collapsed and shook public confidence in the nation's securities markets. The Sarbanes-Oxley Act of 2002 and Its Effect on the Accounting Profession Enron, World Com and Arthur Andersen LLP, three names that have long become synonymous with deceptive accounting practices and lack of transparency, were but a few of the catalysts to the hastily enactment of the Sarbanes-Oxley Act of 2002. More commonly known as SOX, it was enacted on July 29, 2002 and signed into law on July 30, 2002 by President Bush. It’s also known as the 'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate and Auditing Accountability and Responsibility Act' (in the House). Sarbanes-Oxley’s named after sponsors U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative...
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...ACCTG 351B: Business Law (San Francisco, Fall 2013) INSTRUCTOR: KRISTIN L. ROSI Work: (415) 538-4387 FAX: (415) 904-5854 E-mail: krosi@ggu.edu In addition to working as an Adjunct Professor at Golden Gate University, I am employed as an Administrative Law Judge with the California Department of Insurance and as a Pro Tem Judge with the Alameda County Superior Court. Prior to becoming an ALJ, I was the Senior Regional Attorney at the California Public Employment Relations Board, where I authored a treatise on public sector employment. I was awarded an A.B. in Psychology and Women’s Studies by Smith College in 1992; a J.D. (Public Interest Scholar) by University of California, Hastings College of the Law, 1995; and am currently working on my PhD in Judicial Studies from the National Judicial College at the University of Nevada, Reno. OFFICE HOURS: My office is located 1.5 blocks from 536 Mission St., so I can meet there by appointment. Please telephone or email me as early as possible for an appointment. COURSE DESCRIPTION: Focuses on the legal, regulatory and ethical context of professional accounting practice. This course will consider the law and the legal environment within which certified public accountants practice and the most important areas of the law affecting clients. Topics covered in this course are the law of administrative agencies; the regulation of professions generally and of accounting specifically; ethics and professional responsibility, the AICPA's...
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...Deanna Fletcher Regulations: AC502 Final Term Paper Kaplan University March 20, 2015 Regulations: Accountants Responsibilities Accountants have many responsibilities in different areas. They have responsibilities to clients, to thirds parties, and to the government. They have a responsibility to know the regulations, rules and laws that have been put in place for accountants. Lastly accountants have a responsibility to perform their obligations and duties by the code of conduct and to the code of ethics. We will start off with the client. The client by definition is the person who pays the professional or organization for services; the person who engages the professional for their advice or services they render. (Legal Dictionary) For these services the client must cooperate with the accountant in every aspect the accountant deems fit, within the scope of their profession. The accountants responsibilities to the client include to act with integrity, objectively, due care, competence, fully disclose any conflict of interest, maintain client confidentiality, disclose fees to client, and serve the public interest when providing financial services, (AICPA code of conduct) Accountants can also have fiduciary duties to a client if the accountant gives advice to a client involving taxes, assessing management or business consulting. Fiduciary is a legal duty to act solely in the best interest of the client. The case below involves an Atlanta-based accountant breaching his...
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...Micro Enhancement International, Inc. v. Coopers & Lybrand LLP 40 P. 3d 1206 (Wash. App. 2002) Facts of the Case: Micro Enhancement International (MEI) was a software development company that was on the about to have an IPO. They hired Coopers and Lybrand as the auditor. The IPO for MEI was delayed because Coopers and Lybrand were resisting some of MEI’s recognized revenue and were threating to add a “going concern” to the audit. In the end Coopers and Lybrand allowed MEI to recognize the revenue and took away the “going concern” qualification. By the time the issue was settled MEI had lost the underwriter for the IPO and then went bankrupt shortly after. MEI sued Coopers and Lybrand for multiple things, but then wanted to add a breach of fiduciary duty. MEI’s CEO Staples said that, “he trusted Coopers and that Coopers had agreed to do the audit to do the Audit and to serve as MEI’s business advisor…” The judge denied this request and MEI appealed. Procedural History: The judge denied MEI’s request to add the breach of fiduciary duty so MEI appealed. Legal Issue: The issue in this case is the establishment of Cooper and Lybrand’s fiduciary duty to MEI. If this duty is established then MEI will get to add that breach, however, if not, the judge’s original ruling will be affirmed. Reasoning/Analysis: The first thing is to understand what causes a fiduciary duty. There are two types, Matter of Law (between a attorney and client, physicians and patients, partners...
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...love at all. Candy was a lustful, hormone driven young woman whose insecurities led her to engage in sexual activity. Homer was merely a victim of falling in love with someone who, although she stated she loved him, ultimately chose Wally out of guilt rather than Homer, the man she claimed to love. It must be questioned how a woman can have an abortion seemingly nonchalantly? According to Pricilla Coleman, women who have abortions increase by 81% their risk for the development of mental illness, 10% of that being directly linked to the abortion itself (Coleman 2011). It is plausible that Candy’s behavior post-abortion may well have been a result of the abortion itself. During Homer’s relationship with Candy on the Worthington farm, he is placed with a group of migrant farm workers. Out of the group, two are pushed to the forefront of this act; the foreman Arthur Rose, and his daughter Rose Rose. From the beginning Homer looks up to Arthur and his knowledge of apple picking. He forms a good relationship with the crew. Within the crew’s sleeping quarters, there is posted a piece of paper with rules on it, known as the Cider House Rules. When they are eventually read, it is apparent that the content of the rules is not what is important, but the struggle to define who gets to set the rules. The questioning of authority leads back to the beginning with Dr. Larch and his performance of illegal abortions. An incident between Arthur Rose and one of this crewman demonstrates Arthur’s...
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...segments the firm serves with its products is not a risk-free decision or choice for the firm to make in that serving others might cause the firm to lose its ability to effectively serve the specific needs of the 29- to 55-year- old male (again, the historical target customer). This matter is considered more fully later m the case. Third demands and cost drivers for the motorcycle market arc ever changing. Overseas competitors have shifted their focus from being the least expensive to being affordable and to providing a wider variety of motorcycles to customers as options to purchase. This competitive- shift has put pressure on Harley-Davidsons key markers and has forced the firm to respond With over 12 percent and 55 percent of the European and US. heavy weight motorcycle market respectively, Harley- Davidson has a substantial territory to defend. History Harley-Davidson, Inc. has been a publicly traded Firm since 1987. It has two primary divisions: Motorcycles and Delated Products and Financial Services. The Financial Services Division provides credit to motorcycle buyers and dealerships as well as risk man-agement and insurance services for all parts of the firm, The Motorcycles and Related Products Division currently operates through eight primary segments： ■ Parts & Accessories (17.5 percent of net revenue in 2011) ■ General Merchandise (5,9 percent of net revenue in 2011) ■ Licensing ($43.2 million of net revenue m 2011} ■ Harley-Davidson Museum ■ International Sales(32...
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...The Ineffectiveness of the Sarbanes Oxley Act In Corporate Management and Accounting In the early 1990s, a young company named Enron was quickly moving up Fortune magazine’s chart of “America’s Most Innovative Company.” As the corporate world began to herald Enron as the next global leader in business, a dark secret loomed on the horizon of this great energy company. Aggressive entrepreneurs eager to push the company’s stock price higher and a series of fraudulent accounting procedures involving special purpose entities were about to be exposed. In early 2002, the United States Justice Department announced its intent to pursue a criminal investigation into the once mighty company, Enron. After the gross negligence of accounting procedures were discovered at Enron, Congress passed the Sarbanes Oxley Act of 2002. While this legislation was seen by many as the rules to keep large corporations from destroying investors and employees, it also created unnecessary confusion and unbearable costs for American businesses. Perhaps one of the most confusing pieces of the Sarbanes Oxley Act is §404, regarding “the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting.” (Sarbanes Oxley Act of 2002) While this sounds like good legislation, the cost of compliance with §404 varies greatly among public companies, depending on the size of their business. Joseph Piche, founder and CEO of Eikos, Inc., testified...
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...American society and Economy – BMAN 20610 Has Affirmative Action had any positive results? Should the policy be abandoned? ‘Affirmative Action has had an indelible imprint on the university environment’ [1] With primary focus on the impact that affirmative action (AA) has had to African Americans in regard to College admission, this essay will seek to ascertain to what extent the policy has lead to positive results. While in addition, evaluating whether this policy is both a legitimate and a necessary feature within Universities in contemporary America, or should be abandoned. Following President Johnson signing into law, executive order 11246 in 1965, the concept of affirmative action was formed and subsequently integrated within the college admission process in the United States. The primary intention of the policy was to ‘redress the disadvantages associated with overt historical discrimination’. [2] While furthermore, seeking to ensure that institutions, such as Universities, were more ‘representative of the populations they serve’. [3] Since the implementation of the policy, throughout American University Campuses and the corridors of power in Washington, both debate and discourse has taken place in regard to the fairness and necessity of the practice of Affirmative Action within the College Admission process. As asserted by Garcia, those in favour of Affirmative action programs within Colleges viewed that the implementation of the policy was evidently ‘a...
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...The Debate Over Gun Control Gun Control, a term that refers to the management of firearms in an effort to reduce the criminal use of these weapons. (MICROSOFT (R) ENCARTA 1995) In the year 2004 there were more than 210 million privately owned guns in the United States, which makes it plain to see why there are arguments for and against even the smallest amount of gun control. The Second Admendment to the Constitution of the United States, guarantees “the right of the people to keep and bear Arms shall not be infringed.” In the 1930s a law passed by the federal government that required people wishing to own or possess a fully automatic or sawed-off barrel firearm to pay a $200 registration fee. This law was amended in 1986 to ban the manufacture of fully automatic firearms. (MICROSOFT (R) ENCARTA 1995) Some of the U.S. cities, such as Washington D.C., Chicago, and New York City, place restrictions on handgun ownership. A few cities across the U.S. have banned handguns entirely. A federal law restricts handgun amuntion capable of piercing body armor, and also requires that guns with plastic parts to contain enough enough metal in the gun to be detectable amount of metal. Law enforcement groups are among the most influential supports for a stricter gun control laws. Efforts to pass national gun control laws have met fierce opposition from gun lobbiest. However in 1993, after a seven year battle, the congress of the United States passed the Brady bill, which...
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...The great American icon celebrates its first century. MOTORCYCLES They were so young. William S. Harley and Arthur Davidson were only 21 and 20, respectively, when they built their first motorcycles for sale in 1903. Working out of a 10 x 15-ft. backyard shed in Milwaukee, the pair built only three of their bicycle-based single-cylinder motorcycles that year. But what they started has lasted 100 years and grown to become an internationally recognized symbol of America. These two tinkerers and racers were later joined by two more Davidson brothers, William and Walter. The four went on to launch a company that has sold more than 3.7 million motorcycles worldwide. Those bikes have been raced in every type of motorcycle competition and have won...
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...THE DEBATE OVER GUN CONTROL By: Brad Hales ITT-TECH Bessemer, Al. EN 1320 J. Henderson March 9, 2013 Gun Control, a term that refers to the management of firearms in an effort to reduce the criminal use of these weapons. (MICROSOFT (R) ENCARTA 1995) In the year 2004 there were more than 210 million privately owned guns in the United States, which makes it plain to see why there are arguments for and against even the smallest amount of gun control. The Second Amendment to the Constitution of the United States guarantees “the right of the people to keep and bear Arms shall not be infringed.” In the 1930s a law passed by the federal government that required people wishing to own or possess a fully automatic or sawed-off barrel firearm to pay a $200 registration fee. This law was amended in 1986 to ban the manufacture of fully automatic firearms. (MICROSOFT (R) ENCARTA 1995) Some of the U.S. cities, such as Washington D.C., Chicago, and New York City, place restrictions on handgun ownership. A few cities across the U.S. Have handguns banned entirely. A federal law restricts handgun ammunition capable of piercing body armor, and also requires that guns with plastic parts to contain enough metal in the gun to be detectable amount of metal. Law enforcement groups are among the most influential supports for a stricter gun control laws. Efforts to pass national gun control laws have met fierce opposition from gun lobbyist. However in 1993, after a seven...
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...THE LEGAL REGULATION OF THE EXTERNAL COMPANY AUDITOR IN POST-ENRON SOUTH AFRICA Hannine Drake THESIS PRESENTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS AT THE UNIVERSITY OF STELLENBOSCH Supervisor: Prof A.H. van Wyk March 2009 ii DECLARATION By submitting this thesis electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the owner of the copyright thereof (unless to the extent explicitly otherwise stated) and that I have not previously in its entirety or in part submitted it for obtaining any qualification. Date: 25 February 2009 Copyright © 2009 Stellenbosch University All rights reserved iii ACKNOWLEDGEMENTS In acknowledgement to all who have contributed to this work in some form: writing this thesis would have otherwise been like swimming through mud. To my supervisor, Professor Andreas van Wyk, thank you for your leadership, patience, and academic skill in guiding me through the research process. To Adéle Mulder and Charl Marais, thank you for your continuous insight and perspectives, both academic and otherwise. And finally to Hilda and Gerrie Steyn, who have been absolutely crucial throughout all my years of study, thank you for your indispensable support, in all its forms. iv SUMMARY The worldwide increase of corporate failures on the scale of Enron and WorldCom has sparked a renewed international trend of corporate governance review...
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