The pressure to please shareholders may have forced Moody’s to prioritize short-term of profitability over ratings integrity. The culture followed by the company plays any important role on how the employees shape their work. When the CRAs let the culture go for a toss the employees were bounded to follow the new culture in the fear of losing their jobs. In spite of recognizing the issue, when confronted by any employee the management would stop giving them importance and lay them off if required. The culture didn’t seem to promote freedom of opinion where the ethical decisions were to be taken.
He did it by thrashing their accumulation of wealth, the devastation they inflicted on the global economy. They also mistreatment of employee pension funds, Wall Street CEOs apparently still have enough credibility in some quarters to be treated as experts in fiscal responsibility. This writer spent a number of years in the business world during the 1980s and 1990s, as corporate America was transforming itself from a customer-driven set of industries to a greed-driven and conscienceless wealth extraction machine for the investor class. (6 signs our culture is sick with greed,
Conclusion Many companies’ collapses and accounting frauds occurred since the year 2000, which lead the public began to doubt the independence of the auditors. through the cases of Enron and WorldCom can indeed found their major accounting fraud is caused due to auditors loss their independence. The reason caused auditor loss their independence are non-audit service provision, the self-review threat, auditors’ economic dependence on auditees, ex-auditor employment, and long tenure. these factors contributed a cozy relationship between auditors and client firm 's management, and therefore auditors more willing to meet the interests of the client company, rather than protecting shareholders and investors interests. Lack of audit independence will reduce audit quality, and cause audit failure.
To achieve this, they sewed up deals with fictitious clients.For good measure, profits too were padded up to show healthy margins. Over the years, these ghostly clients understandably never paid their bills, leading to a big hole in Satyam’s balance sheet. The hole was plugged by inflating the debtors (dues from clients) in the balance
Therefore, the financial results were distorted by executives in order to show that the expectations of the top management were met. Toshiba is a publicly traded company and has many local and foreign investors. All the investors invested in Toshiba shares faced with a huge loss of wealth due to around 50% decline in the company share prices. 3. Actions Taken to Recover the Company from the Scandal The actions taken to recover the company from the scandal are given below4: The company’s CEO, Hisao Tanaka, assistant general manager, Norio Sasak and consultant, Atsutoshi Nishida resigned from their jobs.
It created fear in workers. Even tough workers were already struggling with their low wages, the rise of unemployment made them afraid of losing their job and end up jobless. Unemployment also did not provide insurance for the citizens without job, leaving them with miserable chances of living. There are many causes that separately contributed to the beginning of the Great Depression. However, the stock market crash created several reasons that can refer to it as the main cause of the Great Depression.
This is huge for investors because the company’s investors just lost a ton of money when the stock plummeted 20%. Investors are not happy with the company hiding their losings from them and instead on trying to do right by the investors and make it right. They don’t take any responsibility for their unethical actions which effected not only the investors but also all the companies involved. Investors and analysts will see this companies actions and will steer away from the company because of its previous unethical actions and the way they reacted after by defending their actions and saying they were not obligated to reveal their problems in the first and second quarter. This case shows how unethical Boeing was and will be forever remembered by current and future investors.
Since power was concentrated on a few top people it can be highlighted that the same people adopted the corrupt behavior from their boss. They all concealed the defiant behavior because they were egocentric as well since they were benefiting from the fraudulent behaviors. Managers could have reported to the executive or board of directors because most of these behaviors were not just defiant but criminal as well. The executive members who felt undermined could have raised alarms so that the irregularities could be addressed. Also the management could have just respected all the workers knowing that all have same needs and wants thus equally addressed.
Sunbeam was pressured to fix their financial issues, and were looking at all options on how to solve their internal crisis. They brought in Chainsaw Al, who had a reputation of cutting companies to the bone. Sunbeam senior management wanted to, “create the illusion of a successful restructuring of Sunbeam in orderto inflate its stock price and thus improve its value as an acquisition,” (Mintz & Morris,2014). Chainsaw Al’s fraudulent actions as CEO gave Sunbeam a market price of $52 per share, which in 1998, fell to $34.63 per share. When Arthur Anderson conducted their audits, they should have considered the fact that Sunbeam went from financially risky to successful in a short amount of time.
Problem Statement Since politics and power plays are rampant in organizations, PwC is also not exception. The political behavior of the previous CEO of the business have negatively affected the enterprise consulting department’s performance. This also brought a negative image to the company. Political and Power Behaviors The CEO had a close relationship with the client of the EC department, for the reasons to manipulate pricing of the department. For favorable clients, CEO provided an executive order to reduce prices.