What are the responsibilities owed by Ming?
Ming replies to Bing Ho. to the company. the stakeholders and the board of managers The responsibilities that Ming takes as an employee are
* Accountability
* Objectivity
* Integrity
* Honesty/duty of attention
Is there any struggle of involvement faced by Ming as an helper comptroller in Wholesalers Ltd? Ming V Bing
Decide to travel with Bing’s usher as instructed or record Bing’s deceitful disagreement or follow the company’s policy. Yes there is a struggle of involvement because if Ming says anything there is a opportunity that he will be fired. As he is merely an helper comptroller and Bing is the main comptroller there is a opportunity that he will non be believed as Bing is at that place much longer. ( ruddy is my reply ) 2. For instance scenario 2
Explain any ethic hazards and possible effects faced by Ming when covering with Alice. Ethical hazards:
* Failure to make what was asked of him
* Failure to use responsibility of attention
* Failure to use revelation
* Failure to move ethically
Consequences
* Misstated fiscal statement
* False untrue books
* Acceptance from Alice and Bing Ho to follow
* Failure to follow Bing’s instructions
* Loss of Alice’s friendly relationship
* The company suffers
* Breaching Bing’s instructions would take to Ming being disciplined
Ming might be tempted to state Alice about her father’s traffics. as this would non be ethical? but there is a opportunity if he says anything to Alice that she will halt traveling out with him. Remark on Bing’s slogan and advice of Ming’s possible actions. Bing’s slogan is “being a professional comptroller holds the key to all” P12. . Accountants have a responsibility towards their employer. trueness to the regulating organic structure. and direction and the duty to guarantee such responsibilities are performed with the objectiveness. unity and moralss of a professional individual. Internal deceitful activities.
P13. all comptrollers are expected to detect the criterions of attention. professionalism and ethical behavior as portion of their primary professional responsibility to safeguard the public involvement.
3. Taking both scenarios together. what are the ethical and professional issues faced by Ming. Taking both scenarios the ethical issues are that An accountant’s function is that of executing under tight budget and timelines. keeping relationships with clietns and steadfast direction. and using rigorous accounting regulations and professional criterions. How would you rede Ming?
Follow the company’s process for describing minutess. Let Ming be disciplined. If Ming decides to enter Bing’s disagreements to the board of managers. objectiveness. and unity and independency are his responsibilities. Technical competence. responsibility of attention. professional issues chapter 3.
P 54 book chapter 2
Alan Bond the gross revenues adult male
1. He is a phase 2. p44 tabular array.
Which means that he merely interested in his ain opportunism. From P 42
* Treating the company severely.
* Reduced the recognition footings
* Leases terminate without compensation
* Failed to accept the hearers reccomdations.
2. His selfish behavior. compulsion with growing is the primary ground for the death of the company. His ongoing acquisitions. enlargement of debts was wholly unsustainable. He was more concerned with personal wealth and growing of his imperium. The deductions of his actions would come to harm others and he did non care so he is a phase 2.
3. As an Hearer there are minimal criterions. objectivenesss and unity criterions. Due attention. accomplishment and competency are besides primary traits of an hearer. When evaluation person as a client. consideration must be given to whether the client poses an unusual unacceptable hazard. That would be a client that lacks unity. and by deduction would present a greater opportunity of mistakes on abnormality. The facts are non given right or if it remains undetected the hearer faces a great hazard of judicial proceeding for carelessness and fraud. It would be harm to his repute. Therefore in sing taking on a client like Bond. an hearer should earnestly see the unity of the client before accepting the audit.
4. Rights position: brand determinations without regard for others ( stockholders ) . theory of rights ( what is regard for others ) . Consideration has to be given to the rights of others involved and guarantee that the determination respects the rights of others that may be involved. Must do certain determinations made respects the rights of others. Diverted money. and the manner he treated the assets to be his ain failed to esteem the rights of the stockholders. therefore his actions were unethical.
5. They are both corporate knaves. they are both the same. But to give recognition where it is due Bond did confront the effects of his actions. He faced some duty for his actions. Wrong is still incorrect. and both behaviors were unethical and despite Bond confronting the bench they are both knaves.
P 85 chapter 3 Professional Misconduct
Member borrowed money from his client. to put and to direct his kid to school. 1. Identify the cardinal rules of professional behavior that the member breached and explicate why you think they have been breached. * Integrity: He was dishonest
* Ethical behavior: he merely gave back $ 29. 000 ; tribunal order was non plenty to halt him. * Independence: he wasn’t clean in his traffics.
* Objectivity
2. The member was found guilty of professional misconduct. What penalties do you believe are suiting for this member’s behavior? a. The instance was recorded and published ( name and shame ) . to be fined every bit good as this is the protocol. and he would be called before the legal squad ( commission of set ) and asked to warrant his legal behavior. 3. Would your reply in inquiry 1 and 2 differ if the member repaid the loans when they were due? B. No he should non hold asked the clients for money for personal grounds. refunding the loans by the due day of the month makes no difference. he should non hold a struggle of involvement with a client. borrowing from a client compromises one’s independency. 4. Make you believe that a member’s name should be published when they are found guilty of misconduct? c. Yes. IAASA is the accounting board for professional comptrollers. The IAASA trades with the codification of behavior. for different people. board members. employees. client of chartered of rights. d. Professional insurance. insurance for comptrollers. e. Civil liability – jointly and badly apt.
P113 chapter 4
hypertext transfer protocol: //www. apesb. org. au/attachments/5-GN1. pdf
Half full or half empty
1. What are the facts of the instance?
Who what when where and how
* Bill Turner spent the twenty-four hours on 31st December. executing stock list observation processs at a grain storage tower. * Had measured the grain on old 2 counts. so knew what he was making. * He is the in-charge comptroller on this audit.
* Bill’s history was 10 % below that of the clients. which was important adequate to observe. * As this caused a bead in net income. he documented the findings. and proposed to set the entry for the difference. * A disagreement had besides occurred 2 months antecedently when it was carried out by a authorities functionary. but was non every bit great as this disagreement. * He documented this every bit good and the fact that no alteration was made so either. * Bill told Greg. who was the engagement spouse.
* Greg advised Bill that it would be a sensitive issue with the client. * He said that it is highly hard to cipher this and that 10 % disagreement sometimes occurred. * He said he would manage the affair and non to make anything ; including talk to the client about it. * Greg kept the paper.
* When he was finished Bill went back to the office to wrap it up. * There were no stock list documents in the file.
* When he asked about it ; Greg handed him a new set of files. * These new files had the day of the month as 31st December. had Greg’s signature but had the book sum of grain recorded. * Greg had personally performed extra work on the grain stock list after the twelvemonth terminal. And based on his ain findings had substituted his ain documents with the 1s that Bill had prepared. * There was no record of Bill’s proposed accommodations.
* So hence an unqualified sentiment was later issued. 2. What are the ethical issues in the instance?
2. a Who are the primary stakeholders?
* Bill
* Greg
* Directors of the grain Storage tower
* Stakeholders of the Grain storage tower
* The accounting house which they worked.
2. B Define the ethical issues.
* Bill’s duty to Greg versus his independency and objectiveness * Bill’s duty to protect the involvements of the company versus the duty to Greg. * Overall. Bill’s job is how to respond to Greg blatantly disregarding Bill’s proposed accommodations. 3. What are the norms. rules. and values related to the instance? * Technical and professional criterions: Bill and Greg should transport out their work in conformity with the proficient and professional criterions relevant to that work ) * Integrity: ( Greg should be straightforward )
* Competence and due attention: ( Bill’s duty as an comptroller )
4. What are the alternate classs of action?
* Bill can make nil
* Bill can seek to raise the issue with direction
* Bill can vacate
* Bill can raise his concerns informally with the external audits who already audited the topographic point.
* Bill can seek to convert Greg to describe his findings.
5. What is the best class of action that is consistent with the norms. rules and values identified in measure 3? * He does nil – would transgress all 3 rules identified in measure 3 * Bill can seek to raise the issue with direction – may be consistent with the rules but does non give Greg a opportunity to explicate himself. * Bill can vacate – does non fulfill any of the rules and abrogates duty * Bill can raise his concerns informally with the external audits who already audited the topographic point – may be consistent with the rules but does non give Greg a opportunity to explicate himself * Bill can seek to convert Greg to describe his findings- is consistent with unity and allows Greg to explicate himself ( e. g. it may be that the affair is portion of a broader but confidential probe that Greg is carry oning ) . 6. What are effects of each possible class of action? * Bill can make nil
* will lenify Greg
* could hold damaging fiscal effects for the administration if there are continual losingss of stock list and hard currency * would do Bill to transgress his ethical criterions as outlined in the Code
* Bill can seek to raise the issue with direction
* may foreground jobs within the administration and lead to their rectification * may ensue in action being taken against the employee who has failed to maintain equal grain records. * could hold a negative impact on Bill’s calling aspirations if he has to go on working with Greg. Alternatively. Bill may be rewarded for placing the jobs
* Bill can vacate
* may non ensue in job being identified. which may hold damaging effects on the administration * has a personal cost
* Bill can raise his concerns informally with the external audits who already audited the topographic point. * may continue Bill’s unity
* may take to an independent probe
* could hold a negative impact on Bill’s calling aspirations if he is identified as the beginning
* Bill can seek to convert Greg to describe his findings.
* may do Greg to decline and take disciplinary action against Bill * May cause Greg to explicate his actions to Bill’s satisfaction and so settle the affair
7. What is the determination?
In the visible radiation of the analysis. Bill could follow the undermentioned program: First. Bill can seek one time more to convert Greg to describe Bill’s findings and if this is non successful. Bill could raise his concerns with management/his peers/the audit commission. etc. This allows Greg the chance to decide the affair but. if unsuccessful. means that the issue will likely be resolved internally.
Chapter 5
P 143
Corporate administration and the prostration of Enron
1. Why was there no accommodation in Enron’s portion monetary value when sophisticated investors knew of the complex fiscal construction. off balance sheet entities. deficiency of revelation. the deficiency of credibleness of Anderson’s enfranchisement. and loss of independency between the hearers and Enron? Remark on the grounds why you think these factors were non impounded into the portion monetary value. It was extremely known in the analytic community that Enron’s fiscal construction was extremely complex. No-one on the outside truly understood Enron’s fiscal status but they besides knew that they didn’t know. Enron was a faith stock. The aggressively lessened value of Anderson’s enfranchisement for a company like Enron with complicated accounting. abundant consulting chances. and obvious comptroller planning. should hold been impounded in Enron’s monetary value from the get go. but it was non.
2. Even though Enron had what appeared to be a board construction that satisfied the guidelines for good corporate administration. how did information dissymmetry and the board’s civilization contribute to Enron’s death? The board were long clip functioning members who were familiar with the direction squads. therefore they believed what they were told about the company as they had no ground to distrust the direction. Management told a convincing narrative. and agnosticism. intuition. healthy examination were inconsistent with the board’s civilization. High degrees of compensation may compromise managers independency. since a director’s crisp inquiring of senior direction may take to elusive force per unit areas against his re-nomination. Stock-based manager compensation is besides a dual edged blade: it may both heighten the board’s energy as a stockholder agent but besides increase its ambivalency ( uncertainness ) about bring outing abashing facts that will cut down the portion monetary value.
3. As option grants increased. Enron executives were confronted with two inducements. fraud and hazard pickings. Does this mean that there were no positive effects with portion options? Share options may be a manner of get the better ofing the involvement divergency between direction and stockholders. Share options are the most efficient manner of get the better ofing the bureau job when managerial wages is linked to the monetary value of the firm’s portions. Associating managerial wages to the monetary value of the firm’s portions alleviate the inducement job of actuating direction. The stockholders are able to use the information that is publicly available ( portion monetary value ) to supervise direction. If directors become stockholders via portion options they have a direct involvement in increasing portion monetary value. Stock options have besides give directors peculiar inducements to set about hard steps that may even cut down the peril of the house but that may be personally nerve-racking.
4. If employee portion strategies are to go on as inducement to actuate employees to increase steadfast value. what if any. limitations should be placed on them? 5. Structure the strategy so that employees become entitled to portions merely if you sell or float the company ; 6. Restrict the strategy to certain cardinal employees. for illustration. those with scarce managerial or proficient accomplishments ;
7. Enron demonstrates that there are jobs that can non be solved. but can merely be contained. Imperfectly fashioned inducements and the deficiency of temperateness contributed to the prostration of Enron. Remark on this statement. Are at that place any other hapless corporate administration patterns that played a portion in the prostration?
Thingss to alter
Anderson and what could hold been done with them
There are at least two obvious ways to supervise. First. an internal “inspector general” might supply disinterested internal reappraisal of of import accounting judgements made by the Houston spouses. an internal auditor’s audit. Second. spouses might revolve among offices ( for the same ground that bank officers often rotate ) . Neither of these mechanisms. nor any other. seems to hold been used by Andersen. Indeed. it seems that the Houston office could reject accounting judgements from Chicago central office with impunity. 10
Board of managers
One possible manner to extenuate some of these tensenesss is to alter the nominating and compensation patterns for what might be called “trustee” managers in big public corporations.
Compensation for audit commission members should be different. a level fee ( or time-charged ) instead than incentive-based. Audit commission members are in existent sense the corporation’s conformity officers. To protect both the fact and visual aspect of their willingness to ferret out bad facts. they should non have compensation closely tied to the corporation’s net incomes or stock monetary value.
One option is to raise legal liability for managers for breaches of responsibility of attention. or more peculiarly. breach of the responsibility of managerial inadvertence.
