Moreover, the company has no intention of liquidating or ceasing its business. 4. Objectivity Principle: This principle states that the company should record its information based on facts and proper evidence and not only rely on the opinion of the accountants preparing financial statements. The personal interest and benefits of the accountants should be kept aside while making financial statements. The aim of this principle is to give a true and fair representation of financial statement to stakeholders.
This will finally mislead the new investors and the existing shareholders. 1.3. Consider what governance measures Securency and the reserved bank could and should have implemented to prevent or limit the opportunity for such false accounting and poor corporate governance. The governance measures that the two companies should have implemented are good documentation to prove that a certain transaction has taken place and also allow for reference in future records. Institutionalizing documents utilized for monetary exchanges, for example, solicitations, inner materials demands, stock receipts and travel cost reports, can keep up consistency in record keeping after some time.
Cendant made EY believe that their financial paperwork was complying with GAAP and not in an unethical manner as it was truly seen at the end of the case. This proves that throughout the case, Cendant Corporation wasn’t acting fully ethical nor with the desired fiduciary actions to their investors and the auditing team in this case being Ernst&Young. Aside from the trust being broken apart between both, there was never a sign of an internal control inside Cedant. Therefore, there shows that the corporate governance for Cendant Corporation didn’t have signs of existence as well. Most frauds that were occurring before the implementation of the SOX-2002, had top management such as in Cendant that didn’t have care for the ethical performances as much as in today’s corporate world with more regulations in hand by the government.
These judgements are considered ethical if it is right and unethical if it is wrong. What are the Ethical Issues Involved? Based on the facts given, Charlene Battle, controller for Castle Corporation is preparing the company’s financial statements at year- end. A financial statement is a formal report on the business position and performance, its purpose is to provide information to its users such as suppliers, customers, creditors etc. which will influence them in the decision-making process.
The body shop was dealing with crisis management trying to fight, argue, deny or prove wrong all the allegations made against the company, leaving them knowing who their stakeholders were, but were stuck working to keep the reputation solid. 4. Explain whether or not you think the Body Shop's social auditing program will save the firm. I think the social audits can save the firm. The audits give the company the chance really look at the stakeholders determine who they are, what they need and what can be fixed around the company to improve its giving the Body Shop a chance to make its stake holders happy and keep the company moving to the future.
The money is in their bank account. But the money cannot be recognized as revenue because Acme Corp has not yet delivered the services to that customer. If Acme Corp decides tomorrow to stop providing their inventory tracking software, the customer will have paid $79.99 for 30 days of access to the software, and only received one day. To account for this discrepancy between money the customer has paid and services the company has provided, FASB accounting rules require Acme Corp to defer the revenue, and then recognize the revenue as the service is
Kano Fashions: A) 1) Restructuring is a process in which may result in transfer of ownership or change the scope of business for the betterment of the company. Restructuring is based on a serious decision that whether to get rid of financial debts, reduction of services or selling a part of business to investors. To implement this decision either the new CEO or the company will make that decision. The objective of restructuring is to ensure that the entity will become more organized and effective. Companies which are financially unstable usually use corporate reconstructions, which facilitates them to remain in business rather than to go for liquidation.
“Culture eats Strategy for business” This quote means that no new strategy will be formulated unless there is a change in the culture. Mrutyunjay Mahapatra, Deputy Managing Director of State Bank of India, says that in order for the change management to be successful three things should be in sync with each other All of the 3 should be in the same speed and should sync with each other to make this technological change successful. Even if one of them is not in sync it will lead to a slow change. State Bank of India is also recruiting employees from the IT background so that these employees can help State Bank of India with the change. From past 2-3 years a total of 700-8—employees have been
Therefore, the liquidator denounced this act and sought for declaration a year later (Stott, 2011). It was held that the decision was intra vires the company and there was no misfeasance had been proved. Although the decision had not been taken by the board, this irregularity action had been obtained unanimous assent of the two directors - the only shareholders of the company (Ottley,
Thus the businesses have to frame the suggestion which are proactive and will help the companies to remain competitive in their sector. According to Peppers and Rogers (2011) the model of business has changed from only transactions to relationship building process. A company simply can’t satisfy customer needs based on one-time transaction in order to ensure growth of business. Thus the company must ensure that’s customer preference are taken into account and must deliver result consistently to ensure long term