125). The use of case study examples is a brilliant tool for making the reader believe that white-collar crime is indeed something that needs to be addressed on a macro rather than a micro level, because the people injured by fraudulent accounting and auditing to name a few white-collar crimes, are not just the people that work for a company or the criminals. The people harmed include members of the community that have used their tax dollars to support these leaders and organizations that claim to work for the benefit of society at large. Rosoff, Pontell & Tillman (2004) suggest that white-collar crimes should be viewed as no less hazardous than blue collar crime, a fact supported by many reviewers of the work including Bergevin, who suggests that white-collar crime as defined by Rosoff, Pontell & Tillman should be considered as "vilified" or costly and damaging as blue-collar crimes (p. 125). The authors suggest that white-collar crimes are on the rise more so than blue-collar crimes, a fact that cannot be disputed given the knowledge that the book is in its third edition. The authors cover other malicious white-collar crimes apart from those committed by accounting professionals or auditors. The government is cracking down on auditors and accounting thanks to the inception of new laws and policies including those established by the government that are now requiring auditors to buckle up and tighten practices so that they are more likely to detect fraud and less likely to commit fraud if tempted in the slightest bit (Rosoff, Pontell & Tillman, 2004). Lastly, the authors argue that it is no longer acceptable to offer "lenient" sentencing...
Rather, it is critical that the government step up and reprimand criminals whether involved in fraudulent accounting or auditing practices or other "consumer" related scams and even political scams and crimes. The authors refer to the rise and collapse of Enron, as do so many authors writing on Fraud, showing just how "universal" white-collar crime can be (Rosoff, Pontell & Tillman, 2004).
Accounting Ethics Ethics of Accounting There have been breaches in the ethics of accounting in recent times. With that in mind, evaluate whether or not the current trend in the regulation of business establishments is favorable to ethical behavior. Supply supportive evidence to your answers (Jeter, 2003). The generally accepted principles of accounting and the standards of auditing in contemporary practice stipulate that the financial statements of any establishment should contain the following
Loyalty to the client was clearly placed above loyalty to the overall public good and the standards of the profession. "Enron paid Andersen $25 million for its audit…and $27 million for 'consulting' and other services" which meant that Anderson had a substantial financial stake in retaining Enron as a client (Kadlec 2002). The Enron case illustrates the difficulty of self-policing within the industry. Today, providing additional services besides the
Accounting fraud is defined as the "intentional misstatement of financial reports, in violation of generally accepted accounting principles, with the objective of making certain people act in detriment to their best interests" (Wuerges & Borba, 2010). The GAAP are the principles by which financial accounting statements are produced, and for a public company these need to be followed, so deviating from GAAP will constitute a violation. Where it becomes a
This process has been ongoing since then. One of the major differences between the two standards is going to be that whereas GAAP emphasizes rules, the IFRS is a principle-based approach. Implementing a principles-based approach has significant implications for American tax practice. Many of the specific differences between the two systems will have a direct impact on tax practice. In IFRS, LIFO is prohibited and inventory write-downs may be reversed
During this process you would want to collect any kind of financial information that will be relevant for the completing the audit. Once this takes place, you would want to establish a follow up interview with key personnel in the company. The idea is compare and analyze what you are being told by executives with actual documentation. Where, you would look for inconsistencies when comparing what the person is
Accounting of Enron In recent months the rules regarding special purpose entitles have come under great scrutiny. Special purpose entities allow firms to raise debt while at the same time making it almost impossible for investors to determine the actual amount of debt exposure. ("Special Purpose Entities are Often a Clever Way to Raise Debt Levels") Thus was the case with Enron, which collapsed in 2001 when their fraudulent accounting practice
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