increasingly diverse and significantly more complex. Customers could insure themselves against all sorts of eventualities—such as a rise or fall in interest rates, a change in the weather, or a customer's inability to pay. By the end, the volume of such financial contracts far outstripped the volume of contracts to deliver actual commodities, and Enron was employing a small army of Ph.D.s in mathematics, physics, and economics to help manage its risk. As Enron's products and services evolved, so did the company's
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What role did the Accounting profession play in the recent subprime mortgage crisis? What could they have done differently? There were many factors that led to the subprime mortgage crisis; low interest rates, greedy asset managers, and a booming housing market, to name a few. None were, in my opinion, more responsible for the crisis than the banks (lenders) and buyers (borrower). The banks approved loans for buyers who, one could not afford the loan, nor did not have the credit history to get the
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What is Business Ethics? Business ethics can be interpreted many ways but taken at the most fundamental level simply means knowing the difference between right and wrong and doing what is right. When we examine business ethics we must consider the actions of the people within the organization as well as the complete organization. It is important for the leaders of the businesses to have a grasp of right and wrong and to understand the effects that their products and services have on the consumer
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and it is leaving its ethics in the dust. In this paper I will discuss the importance of an ethical system, a global set of ethics, and discuss the pros and cons on a global system. Global Ethical Standards In a perfect world, there would be a single set of standards for everything, taxes, banking, business, accounting, etc. We don’t live in a perfect world, period. We live in a world where ethical decisions stare us in the face every day, some of the decisions are easy, and some aren’t
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The four elements of financial management are planning, controlling, organizing and directing, then decision making. Planning allows the financial manager to identify the steps needed to become successful towards accomplishing an organization’s goals. The manager must identify objectives and steps to accomplish the goals. The financial manager then controls each department of the organization. One way to oversee a departments’ progress is by comparing past and current departmental reports.
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The role of ethics and compliance in Starbucks is set in place to ensure that all of Starbuck’s staff from the baristas working the front counter to the corporate staff are all abiding by federal laws and regulations. Ethics in financial practices are sometimes hard to believe. The agency problem is the result of conflict of interest between stockholders and the managers of a firm (Titman & Keown, p. 15, 2011). “A conflict of interest is a situation in which a person has a private or personal
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entering agreement with its own executives company to control risk level. Secondly, Enron’s Chief Financial Officer Andrew Fastow fully controls trading agreements between Enron and SPEs, which means he can make personal profits by cheat other investors. Thirdly, the accounting firm—Arthur Andersen, which have responsibility to providing allegedly unbiased and accurate financial reports to help investors decision making whether invest or not into a corporation. For the purpose of keep receiving huge amount
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Cody McKee Dr. Coleman BU 210 October 16, 2015 Ethics and Accounting One of largest problems facing the accounting profession today is the loss of respect that faces accountants in light of recent accounting scandals. In order to regain lost respect in the accounting profession an accountant must have integrity and ethics that are above and beyond the normal. This fact is true whether the accountant works for a business entity or for a government entity. In either situation the accountant
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Introduction In the case of Accounting for Enron, the scandal of Enron was revealed in October 2001 and eventually led to the largest bankruptcy in American History at the time. Enron, an American energy company based in Houston, Texas, and the dissolution of Arthur Anderson, which was one of the five largest audit and accountancy partnerships in the world. Enron collapsed in large part because of unethical practices of its top officials; they abused their power and manipulated information, and
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impacts organizations in many ways including financial, reputation, psychological and social implications. According to various surveys, monetary losses from fraud are significant. Thus, the organization has to establish an effective fraud management program that also covers the organization response to the whistleblower in the company. It is clear that corporate have major responsibility in their response of complaints regarding accounting, internal accounting control or audit matters where they have
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