However, the application of the 3% independent ownership has been restructured to make SPEs much clearer to delineate between parent company ownership and independent ownership.
Another major issue that arose out of the Enron scandal is the manipulation used by Anderson of derivatives. In a BBC report, Emma Clark explains, "If you dig deep enough into any financial scandal you can usually find a derivative or two to take the blame" (Callahan, npg). Derivatives are in fact financial products that derive their value from any underlying assets that a company might have. Enron, much like other companies used derivative trading in order to fully engage its business and reduce its business risks. Although it was actually profitable within its derivative trading, the accounting practices involved in calculating these profits allowed them to disguise heavy losses in its business sectors attributed to derivatives trading. Enron's case was especially severe "their dubious maneuvers involving derivatives were desgined to enhance the company's "accounting reality" at the expense of its true economic condition" (Callahan, npg). Therefore in the wake of these exploitations, the government has attempted to create many lega barriers to protect the investment of the general public. Regulations now encourage publicly traded companies to place more focus in the protection of their core financial practices rather than seek greater profits through diversification and derivative trading.
Another major issue in the Enron debacle was the lack of disclosure that was involved in the entirety of the accounting procedure. Under the auditing and accounting regulations of the time, Enron had no responsibility to disclose its financial documents for closer inspection to anyone other than its independent auditor. As a result, its claims could not be properly examined by others and thus were viewed as financially sound. This is especially true for financial arrangements that are made internally that involve "contingent liabilities." With greater disclosure in general, the loopholes of SPEs exploited by Enron would be instantly recognized and would be very hard to execute for the corporate party. The Financial Accounting Standards Board has placed greater emphasis on the use of uniform accounting...
However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make
Accounting has been nothing if not a dynamic, global discipline over the last two decades. The role of the accountant has changed dramatically during that time and will continue to do so -- as will the nature of the challenges that the accounting profession faces" Over the past twenty years, the modern business community has been faced with the challenges of globalization, the new predominance of technology in business affairs,
Accounting and Intrusion Detection In a report issued by Paladin Technologies, Inc., entitled: "Security Metrics: Providing Cost Justification for Security Projects," 273 organizations were surveyed on the topic of security. The report illustrates in quantifiable terms the depth and reach of intrusion detection on the financial viability of the organization. The combined reported losses from the firms surveyed totaled $265.6 million in 1999. The highest loss categories were reported as follows: Type
Sunbeam Corporation's fraudulent accounting for its financial years 1996, 1997 and early 1998. The essay also reviews the historic audit failure that occurred, and discusses factors that contributed to the scandal and ways in which it might have been prevented. Sunbeam, the consumer brand name that was to become well-known among generations of Americans, had its beginnings in 1893 when founders John K. Stewart and Thomas J. Clark began manufacturing
This role is in response to clients' demands for a single trustworthy individual or firm to meet all of their financial needs. However, accountants are restricted from providing these services to clients whose financial statements they also prepare." (U.S. Department of Labor, Bureau of Labor Statistics, 2009) 1. Public Accounting The work entitled: "The Reality of the CPA's Role" states that modern CPAs work "behind the scenes as trusted advisors in
In the future, this will improve quality and it will reduce the total number of uninsured. This is when productivity and the standard of living will improve by proactively addressing these issues while they are small. Alternatives To deal with any potential challenges left behind from the Affordable Care Act requires looking at alternatives which can be augmented with the law. The various options that are available include: Enacting provisions that apply
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