Ethics in Accounting: Financial Reporting Scandals

Ethics in Accounting: Financial Reporting Scandals Introduction The first thing is character, before money or anything else. J. P. Morgan Integrity is of utmost importance for a successful career in business and finance in the long run. Some believe that the world of finance lacks ethical considerations. Whereas the truth is that such issues are prevalent in all areas of business. The business environment in much of the world is reeling from the revelation of several financial scandals in the past few years. The optimism of the turn of the century has been replaced by scepticism and distrust. It will be discussed as to how we landed ourselves in this situation, what is being done to correct it, and what the future holds for us. Though Enron has been used as the poster-child for this purpose, breakdowns in accounting and corporate governance in Enron as well as in other companies will be discussed. Some companies that have encountered financial reporting problems will be discussed along with the role of auditors (including Andersens role in Enron), the regulatory environment, some of the causes of the problems, and the current and possible future outcomes. Ethics and Accounting Ethics (maintaining fair and true statements) is a key part of financial reporting. For shareholders to trust a company with money, they must feel confident in the companys financial reporting. Financial reporting presents all data relating to the entityscurrent, historical and projected health meaning investors and shareholders rely upon the financial data available for making informed and educated decisions. To help entities comply with business regulations and maintain financial reporting, shareholders can trust the existing organizations designed to monitor different aspects of the accounting world. Primary organizations are Securities and Exchange Committee (SEC), the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB). These three bodies together ensure financial reporting is fair, reliable, and available to all investors. The specific importance of ethics in business and in financial reporting is to ensure public and investor confidence in companies. Without a strong code of ethics and adherence to that code, individuals may not be certain their investments are secure. Accounting professionals must have a strong ethical and moral reasoning because their decisions regarding financial reporting can have major consequences for individuals as well as corporations and entire nations. Ethics in the business environment are more than just issues relating to accounting; because ethical practices can and will cross boundary from business practice to what a company may ask its accounting professionals to do in financial recording. The many recent scandals involving accounting and reporting fraud generally began at the CEO and made their way down into the financial records. Before the Sarbanes-Oxley Act, various financial abuses such as WorldCom, Enron, and Adelphia Communications plagued the American public and affected economic health of the entire nation adversely. Most of these frauds stemmed from unethical accounting practices instituted at the highest levels of the corporations, but carried out in the financial reporting practices of public accounting firms. In December 2001, Enron, which used to be one of the worlds leading energy companies once, filed the largest bankruptcy in the history of the U.S., using the retirement accounts of thousands of American workers, to enrich those at the highest levels of the corporation. Using thousands of off-the-records partnerships to hide nearly $1 billion in debt and to inflate profits, company had defrauded shareholders of billions. Due to these scandals, President Bush and Congress were forced to take tough stance in the form of the Sarbanes-Oxley Act in July of 2002. When ethics seem to be on the downfall in a society, the common man naturally turns to the government for guidance. Various crises in the history of the United States have led to creation of several regulatory bodies and laws. The three entities in the US, mentioned above, work closely together to ensure financial accounting is honest. The SEC, the FASB, and the PCAOB are each an independent entity, but they often work in cooperation in certain areas such as oversight and reporting. While these three bodies work together, they rely on cooperation from member companies and from participation from â€Å"whistle-blowers† in companies and public citizens. As the Enron collapse illustrated, there were systemic failures in the private-sector watchdog-groups. The SEC and the PCAOB must work closely together and include way to fast-track criminal cases. Enron and other financial reporting scandals Enron was a great symbol of widespread problem in corporate America as its rise was as spectacular as its fall. Enron, formed in 1985 when Internorth purchased Houston Natural Gas was soon being run mainly by Houston Natural Gas executives, with Ken Lay as CEO. In 1990, both Jeffrey Skilling and Andy Fastow were hired. In 1996, Skilling became the President and COO. A meteoric rise in both reputation and stock value came by, with Enron being named as one of Fortunes most admired companies in 2001 and its stock price peaking at $90.56 a share as on August 23, 2000. Much of the companys success was credited to the financial wizardry of Fastow. However, companys fall was just around the corner, with Skilling resigning in August of 2001. This was followed by a $1.2 billion write-off, and the beginning of an SEC investigation in October. By December, Enron had declared bankruptcy and the share price was $.26 per share. If Enron had been a lone case, concern would have dissipated quickly and confidence in capital markets would not have plumped. But it was not so. Before Enron, there were companies such as Waste Management and Sunbeam — not significant by themselves, but they should have acted as a warning of what was to come. After Enron the disclosures kept coming. WorldCom was caught capitalizing expenses. While Enron was trying to outsmart the accounting and capital market regulators, WorldCom made accounting errors that even novice accounting students would know were inappropriate. A disturbing aspect of many of these scandals is the collusion among many executives. An important observation is that all of these scandals cant be attributed to one factor alone. Each one was different. Hence it can be concluded that the solution is not easy to find. There is no single accounting practice that made these entities vulnerable to executive excesses. What these scandals had in common was a culture that was pervasive in corporations. A culture had come in that made it permissible to lie to shareholders and the markets. â€Å"The ends justify the means† became the corporate mantra. Also, the watchdogs, the auditors had turned a blind eye with their focus just on their consulting businesses. They were not as vigilant as they should have been in audits. The auditors role in ensuring fair play Auditors are supposed to protect the public from the types of abuses that have been seen in the past. Even though financial statements are responsibility of management, the shareholders hire auditors for the protection of their interests and to add credibility to financial information provided by the firms. To be credible, auditors need both expertise and integrity. Expertise assures if there is a financial reporting irregularity, the auditor has the capacity to discover it. Integrity assures that auditors will disclose any irregularity they may find. These two qualities are essential. They are also multiplicative that is if either is missing, other has no value. It has been found that both were missing in many cases. Expertise was missing as audits had come under cost cutting measures of firms. This happened often at the cost of quality. Integrity was gone when auditors forgot that the first allegiance of a professional is to the public. Seldom did auditors betray management for the benefit of the public. Hence, even if they did discover reporting problems, rather than reporting them to the public they often helped management devise ways around the reporting problems. Auditors fell into this position (probably not because they were incompetent or unethical but) because of the cultures in major accounting firms. Andersen, Enrons auditor, is a classic example. There were good auditors who got caught up in an economic struggle leading to undue focus on revenue generation. An audit firm having the highest reputation for competence and integrity compromised on its values as that was the only way its partners thought to be economically competitive. In the more recent Satyam case in India, the fraud started at the top level management and reached the financial records. The role of Pricewaterhouse, Satyams auditor, is also controversial in the said scandal. Causes of financial reporting problems The regulatory environment had not changed suddenly then why did the financial reporting problems surface at the time, is a question to be pondered upon. There are many reasons, not one that dominates. It was a confluence of circumstances that opened eyes to the problems. The bursting of the bubble economy was a major reason these financial abuses came to light. When everything was seemed bright, nobody questioned companies financial reports. In accounting the lack of relevance of historical cost accounting and even the basic traditional accounting framework were being discussed. The â€Å"new economy† was not to last forever. And when it did not last, investors began to ask tough questions. For many of the questions, there were no answers — only denials and cover-ups. In the auditing profession, audits had become loss leaders. The balance sheets and income statements had lost value, so auditing of the statements was not important. Thus, many audits became hasty and more of a formality. No one was willing to pay for quality audits, so many audit firms believed there remained no sense in competing on the basis of quality. Cost drove audit decisions. Lower cost even with lower quality was the norm. The passivity of corporate boards was also a contributor. This was worsened by the growing number of complex financial transactions, most of which were beyond understanding of board members, who had gained their experience before such instruments came into being. Even a former accounting professor heading Enrons Audit Committee, a person of utmost integrity, had difficulty understanding the implications of the companys financial manoeuvring. Finally, the biggest culprit is the corporate culture. Focus was laid on short-term gains forgetting about all long-run considerations. Also the executive scorecard became focused on salary. Many players had become greedy — executives, investors, and attorney, among others — but more than that was the need to compete on the basis of compensation. Implications for accounting educators The perpetrators of most of financial reporting scandals are former students, graduates of accounting or MBA programs. So educators must ask themselves: What are they doing wrong and what must they do to fix the problems? The first obvious reaction is to emphasize ethics in business and accounting curricula. This is important. Educators in a business ethics class can not dissuade someone who is inclined to commit a fraud from doing so. But it is also true that most perpetrators did not at the onset set out to commit a fraud. They simply got ended up on a slippery zone. Also, the most disappointing aspect about most of the scandals is the number of people who, (though not personally involved) knew what was happening and still did nothing. Exceptions to the rule are some courageous whistle blowers, many of whom were products of university accounting programs. Thus, the focus of ethics classes should be to recognize and analyse the situations that can lead to compromise on ones ideals and values, and to promote the reporting of inappropriate behaviour. This can be best done in context because ethics issues come up in context, with you imagining yourself in the real situation. It is easy to go into an ethics class and give the answer that the instructor wants. It is an altogether different thing to put ones self in a case situation with conflicting pressures, and determine the appropriate action when ethics is only one of the many factors impacting your decision. Conclusion The accounting profession is in the middle of a challenging time. A reputation gained over years and decades can be lost in a day. Accountants were thought of as persons of high integrity working at an uninteresting job. In the current scenario the job has gotten more interesting, but at the cost of their reputation for integrity. It is essential to win back the trust of the public and maintain their belief in the importance of accounting. The road to restoring integrity of accountants today is a long one. The job will neither be quick nor easy, with the new series of financial reporting scandals that have come up. References Wikipedia online encyclopaedia Sarbanes-Oxley Act. http://en.wikipedia.org/wiki/Sarbanes- Oxley_Act#Overview_of_the_PCAOB.27s_requirements Financial oversight of Enron: SEC and private-sector watchdogs http://www.senate.gov/~gov_affairs/100702watchdogsreport.pdf http://www.associatedcontent.com/article/54065/accounting_ethics.html

Why do females migrate to work as maids? Essay -- Immigration, Domesti

Why do females migrate to work as maids? In general woman will migrate to work as domestic workers for one of three reason. (i) limited or no jobs in their country of origin (ii) the income in there country of origin is not enough to sustain there family; and (iii) to get away from a volatile family situation. Women see working as a maid in another country as way to solve these problems and ways to support there families back home. However the question has arisen once these women from lesser developed nations arrive in the rich developed nations does working as a ‘maid’ offer greater independence or does it just lead to more oppression and exploitation? This essay will demonstrate using the United Sates of America and the United Arab Emirates as a case study,that there is no conclusive answer to the question posed; rather it depends on the country and the individual circumstances of each person. Does the employment offer them greater independence in the US? Domestic workers experience in the United Sates varies dramatically depending on the visa-status of women and the work arrangements in place for the domestic worker. In general Live in maids in the US are the most devoid of independence and control of their lives, and often work long hours without a day off. On the other hand live out domestic workers to some extent has more independence and freedom of their lives, but this is dependent on the worker being legally allowed to work and remain in the US. The common conception of a ‘live-out’ maid is that they are empowered and have control of lives, however in the US some women working as ‘maids’ are objectified and treated as commodity to be sold at auction. May women are exploited through labor agencies in the ... ...hem to help their families back home and improve their own financial situation. Another benefit from working in the UAE is that generosity is a social value within the UAE. Employers give tips to their employees, give them money to buy gifts and electronic once their contract ends for their families back home, and the domestic workers get to travel over summer with their employer (ilo report p.34). It could be argued that domestic workers in the UAE do have some sense of agency like the workers in the US, but no where near the same extent. Arguable the domestic workers have agency due to the fact that they had a choice whether or not to go work in UAE and they independently earning money for there family. Nevertheless they lack agency in terms of their freedom of movement thought and sexuality since they are ‘enslaved’ to their employer to the end of their contract.

Explain How To Support Others To Promote Diversity Equality And Inclusion

Task A Short answer questions Ai Using the table below, explain in your own words what each term means. Give one example from care practice to illustrate your explanations. Diversity: The concept of diversity encompasses acceptance and respect. It means understanding that each individual is unique, and recognizing our individual differences. These can be along the dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies.Example: One of my workmates wears a head cloth due to her religion, every one who works with her accepts that and do not object or make fun of her†¦ Every one respects her religion. Equality: Equality defined basically means equal rights for people regardless of what factors they might have that are different. Equality states that because they are human they must be equal. Example: every one is treated the same way. Inclusion: Inclusion is based upon the i dea of allowing everyone equal access to a service regardless of gender, disability, religion i e, There are many ways to ensure that your setting adheres to its inclusion policy.Example: I am feeling respected and valued for who I am at work. Discrimination: A person is treated less favourably than someone else and that the treatment is for a reason relating to the person’s protected characteristic (e. g. disability) Example: My workmate has a slight disability but is treated the same way as the rest of my â€Å"team† no favours or less favours, just the same as the rest of us. Aii For each of the following people/groups of people, describe two different possible effects of discrimination.An individual: Loss of opportunities, withdrawal and depression, loss of self esteem. Their families: Anger, frustration and helplessness. Wider society: Loss of opportunities (what the individuals could contribute to society), division and disharmony. Those who discriminate: False s ense of self importance, possibly shame if they are confronted about their actions (discrimination is not always intended). Aiii Using the table below, identify three ways of challenging discrimination, and describe how each will promote change. Way of challenging discrimination, how this will promote change. 1. Policy and Procedures. 2. Direct Confrontation. 3. Reporting Discrimination I can use each of these methods to encourage the abuser to see and understand what they have done wrong. This is more likely to promote a change in their behaviour than leaving them unchallenged. It also sends a message to others in the setting. Task B Leaflet Bi Your work setting is running an induction course for new social care workers in an adult social care setting.Guidance for new workers. How can I learn new things? You can be told information, watch someone else do a task, talk about ideas with other people, read information or guidance, watch a DVD, research, ask your manager. A combination of all of the above is probably best, but different people prefer some ways of learning to others. Find the way that suits you best. You should discuss and reach agreement with your manager about the ways that will help you learn best.You might at tend training sessions, or be asked to read part of a book, training package or policy document, or to talk about your work with another team member who has knowledge to pass on. How will I be assessed? During your induction period (which could be up to 12 weeks) you will be assessed to make sure you have understood everything you have learned. Someone within your organisation, for example, your line manager or your training manager, might carry out this assessment. If part of your induction includes an accredited training programme, then someone outside of your organisation may carry out the assessment.However, it will still be your manager who has the responsibility to sign off your Certificate of Successful Completion when you have successfully completed your induction period. How can I develop my skills further? Essential learning for specific tasks, the induction provide you with the basic information and skills necessary for work There will be some tasks, however, that you may be required to do, that will need further learning before they can be performed safely. Examples include, using moving and handling equipment and preparation of food.Your employer must provide you with the learning you need to be able to perform these and other tasks safely. You should not be asked to undertake these tasks without having added the appropriate learning to your induction. Learning should continue throughout your career, and should enable you to develop new skills, and open up career options. Remember that you need to have a look at our policy's and various Act's which may include: Sex Discrimination Act, Race Relations Act, DisabilityDiscrimination Act, Equality Act, Human Rights Act, Health and Social Care Act (Regulated activities) and the Essential Standards, Codes of Practice for Social Care Workers. For me as a trainer, I need to challenge any abuse and explain why it is wrong. c) A description of how inclusive practice can promote equality and support diversity . Through Training and Discussion: Training and discussions are essential to raise awareness of diversity, equality and inclusion in any work settings. Discussion in meetings or group discussion among staffs play a vital role to raise awareness of equality, diversity and inclusion.The more they will engage in discussion or obtain trainings about this issue the more they will learn and be aware of and also they will be able and put them in their everyday’s practice. d) An explanation of how to support others to promote diversity, equality and inclusion. Through providing leaflet, information and policies and procedures: Providing leaflets and sufficient information regarding diversity and equality can raise awareness to a social care worker by acquiring adequate knowledge about it.It also helps them to know about the consequences if agreed ways of working are not followed which restrain them from doing any form of discrimination relating this issue. Task C Reflective account C i Write a reflective account describing: †¢ How your personal preferences, attitudes, heritage and beliefs might impact on working practice. †¢ How to ensure that your own practice is inclusive and respects the beliefs, culture, values and preferences of individuals. Suggested word count: 500 – 700 words A normal work night†¦ I come into work about 19. 0 have a brew and then get handover at 20. 00. Depending if I am in charge or a floor worker I either give out the medicines or start suppers. If I work on the floor I go around to the residents and offer them a few different things they can have for supper, such as toasts with jam, marmalade or just butter, a selection of sandwiches, cereals and hot/cold drinks, such as coffee, tea, chocolate, horlicks and juice or milk. After supper some of my residents watch TV before they retire to bed, and some go to bed straight after supper and may need assistance to get ready.Our lady X likes to go straight after supper a nd needs guidance to her room and help with freshen up prior getting in to bed, I assist her with personal hygiene needs and to put her nightdress on. Then I tuck her in proper and make sure she is comfortable and safe in bed, make sure the commode is at the side of her bed and her pressure mat is in front of the bed (just where she usually sit up to put her feet on the floor) so that she alert us staff when she is up out of bed or if she requires assistance during the night.During the night we do 2 hourly checks on our residents to ensure that they are safe, dry, clean and having adequate rest/sleep. In the morning I usually help 4-5 residents to get ready for the day, I pick out two outfits and let the resident choose if they haven't already got something in mind what to wear. I make sure the water is warm before I assist with the personal hygiene needs and I check their skin integrity to ensure that they don't have any pressure points that are sore. I always ask the resident to try to do as much as possible by themselves to maintain their independence, and I always explain to my residents what I am going to do in advance so they can assist me in my job. My residents likes to have a laugh in the morning and some of them likes the radio on in their room whilst they are getting ready so I try to meet their needs as much at possible. We often talk about their lives, what they have worked with, where they've been on holiday and so on. The residents often like to hear about my life, since I'm from Sweden, and I tell them when ever they ask.I always try to respect my residents choices and wishes, I don't have a religion and is a non believer, but I respect that people have their own religion and believes and I would never say anything to upset or hurt any of my residents, workmates or anyone. If someone show me respect they get that respect straight back, I don't like people who go around and talk behind your back, if I have done/said something wrong, please say it straight to me so I can justify myself to make it right.Cii Write a brief account that describes examples of inclusive practice. Suggested word count: 150 – 200 words Inclusive Practice is a term which means the practical things that we do, when we are working with people who use our services, which demonstrate our professional values, standards, and principles in action. In particular Inclusive Practice is about participation, collaboration, and including people: where individuals are fully involved in choices and decisions that affect their lives and in the matters that are important to them.People who use mental health services say that being listened to, having their individual needs taken account of, and staff attitudes and values is a very important part of keeping well. The experience of participation is often as important as the end result. Participation itself may be an outcome. Inclusive Practice can benefit staff through sharing knowl edge and learning new and effective ways of working with people. People who use services bring new ideas, and we are able to respond from a more informed position. Inclusive Practice is good practice, and is also about a human rights and anti-discriminatory approach to mental health.Inclusive practice underpins anti-discriminatory practice and is the practical way in which we put our equality policies/agenda into action. All people are citizens and have rights and entitlements. They should be treated fairly regardless of race, religion or abilities. This applies no matter: what they think or say, what type of family they come from, what language(s) they speak, whether they have a disability or whether they are rich or poor. All people have an equal right to be listened to and valued in the setting. Equality and diversityMy thought on this subject is that it encompasses gender, race, age, disability, linguistic differences, learning abilities, sexual orientation, socio-economic statu s and cultural background and so on. Ciii Write a brief account that describes practice which excludes the individual and is discriminatory. Suggested word count: 150 – 200 words The activity coordinator might come to our unit to play dominoes with our residents but have to exclude two gentlemen, because one of them is deaf and the other one is blind, and that has everything to do with the lack of time and/or staff†¦To have the TV on so low that the blind gentleman can not hear the program he would like to listen to and have to go to his room and become isolated. Residents in wheelchairs that can't go on outings i. e a pub lunch because there is no wheelchair access to the pub or the door way are to narrow for the wheelchair. Residents with dementia that are excluded from outings due to being loud or noisy. To tell a resident to stay on his/her room because he/she is not allowed to sit in the lounge with others because he/she is shouting out at times or being very loud t alking to him/her self.

British Columbia Geography and Facts

British Columbia is the province located the farthest west in Canada and is bounded by the Alaska Panhandle, the Yukon and Northwest Territories, Alberta and the U.S. states of Montana, Idaho and Washington. It is a part of the Pacific Northwest and is Canadas third most populated province behind Ontario and Quebec.British Columbia has a long history that still shows throughout much of the province today. It is believed that its native peoples moved into the province nearly 10,000 years ago after crossing the Bering Land Bridge from Asia. It is also likely that British Columbias coast became one of the most densely populated areas in North America prior to European arrival.Today, British Columbia features urban areas like Vancouver as well as rural areas with mountain, ocean and valley landscapes. These varied landscapes have led to British Columbia becoming a popular tourist destination in Canada and activities such as hiking, skiing and golf are common. In addition, most recently, British Columbia played host to the 2010 Winter Olympic Games. British Columbias Population and Ethnicities British Columbias First Nations people may have numbered around 300,000 prior to European contact. Their population remained largely undisturbed until 1778 when the British explorer James Cook landed on Vancouver Island. The native population then began to decline in the late 1700s as more Europeans arrived. In the late 1800s, British Columbias population grew further when gold was discovered in the Fraser River and on the Caribou coast, leading to the establishment of several mining towns. Today, British Columbia is one of the most ethnically diverse regions in Canada. Over 40 aboriginal groups are still represented and different Asian, German, Italian and Russian communities thrive in the area as well. British Columbias current population is around 4.1 million, with the largest concentrations being in Vancouver and Victoria. Facts About Region and Topography The province of British Columbia is often divided into six different regions beginning with Northern British Columbia, followed by the Caribou Chilcotin Coast, Vancouver Island, the Vancouver Coast and Mountains, the Thompson Okanagan and the Kootenay Rockies. British Columbia has a varied topography throughout its different regions and mountains, valleys and scenic waterways are common. To protect its natural landscapes from development and over tourism, British Columbia has a diverse system of parks and 12.5% of its land is protected. British Columbias highest point is Fairweather Mountain at 15,299 feet (4,663 m) and the province has an area of 364,764 square miles (944,735 sq km). British Columbias Climate Like its topography, British Columbia has a varied climate that is highly influenced by its mountains and the Pacific Ocean. Overall, the coast is temperate and wet. The interior valley regions such as Kamloops are generally hot in the summer and cold in the winter. British Columbias mountains also have cold winters and mild summers. Economy Historically, British Columbias economy has focused on natural resource extraction such as fishing and timber. Recently however, industries such as ecotourism, technology and film have grown in the province. Main Cities The largest cities are Vancouver and Victoria. Other big cities in British Columbia include Kelowna, Kamloops, Nanaimo, Prince George, and Vernon. Whistler, though not large is one of British Columbias most popular cities for outdoor activities- particularly winter sports. Resources and Further Reading Tourism British Columbia. (n.d.). About BC - British Columbia - Tourism BC, Official Site. Retrieved from: http://www.hellobc.com/en-CA/AboutBC/BritishColumbia.htm