Enron Case Study

When Sharron Watkins, the former UP of Corporate Development offered to show the problems in counting decisions, Ken Lay, the Chair of the Board refused and said â€Å"He rather not see it†. 2. Regulatory Agencies, SEC and BAS Enron was able to hide their losses behind their ESP. or Special Purpose Entities by omitting an Spec's assets and liabilities from its consolidated financial statements and both SEC and BAS failed to provide formal guidelines for companies to follow in ESP. accounting and reporting.As a result of the minimal legal and accounting guidelines for Esp., Enron along with other companies was able to divert huge amounts of their liabilities and asses to off-balance sheet entities. 3. Management and Accounting team of Enron Both management and accounting team Of Enron manipulated the revenue recognition principle by making vague assumptions that inflated the profits booked on Enron's commodity contracts. There attempt was to keep the stock prices high by showin g inflated financial statements in order to receive high credit ratings and increased lender cash flow into the company. 4.Anderson Accounting Firm The Anderson firm, an independent audit firm failed to provide a more transparent financial statements of Enron. Anderson firm audited the many for 1 5 years where its auditors failed to perform their duties and professional standards of accounting. In fact, Anderson made efforts to restructure Enron's ESP. to continue to qualify as unconsolidated entities once they became aware of Enron's rapidly deteriorating financial condition. Anderson firm was more interested in retaining Enron as their client to provide consulting services hence creating a conflict of interest.Lists three type of consulting services that audit firm have provided to their audit client in recent years. For each item, indicate the specific threats, if any, that the reversion of the given services can pose for an audit firm independence. Auditors independence is consi dered a cornerstone in the accounting profession since they are entrusted by the general public to provide true picture of a company's financial position. It is believed that non-audit services provided by audit firms impair auditors independence to fairly attest the financial statements produced by the client company.Consulting and audit a same firm causes conflict of interest. Anderson firm earned approximately $52 million in fees from Enron in 2000, less than half of which was directly elated to the auditing, rest were for non-audit services. Audit firm may provide many types of consulting services such as: 1. Tax consulting services 2. Accounting system design services 3. Bookkeeping or other related services 4. Financial advice services, including internal audit consulting service. In this highly competitive market, non-audit services have taken precedence over the traditional accounting and auditing services.Even if an audit firm is fairly attesting financial statements and pr ovides honest opinion of a company, its stakeholders and other users may still presume otherwise due o the recent accounting debacles such as Enron and Anderson firm. The additional non-audit services may prove to be a threat to the audit firm's independence. By providing financial advice services for Enron's accounting procedures, Anderson provided them an opportunity to manipulate the reporting and treatment of the Esp..Bookkeeping and following correct accounting procedures are very important components of preparing financial statements. Manipulations of these data are likely to show up when it is audited accurately, and with precision. When the same company repaper and audits the financial statements, it can create conflict of interest just like in this case, where the creators of accounting procedures I. E the management and Anderson team fabricated the financial statements by using complex accounting procedures and loopholes that users could not understand.Any other consulting services such as tax advisory also creates a threat to the independence of the auditing firm, where manipulations are more likely to happen which can hurt the creditability of the audited statements and the auditor's opinion about the company. For purpose of this question, assume that the excerpts from the Power Report shown in Exhibit 3 provide accurate description of Andersen's involvement in Enron accounting and financial reporting decisions. Given this assumption, do you believe that Andersen's involvement in those decisions violated any professional auditing standards?If so, lists those standards and briefly explain your rationale. Arthur Anderson, once known as one of the top accounting firms in nation, was ridiculed and criticized for their questionable accounting and auditing procedures of their client Enron, which ultimately lead to its demise. Their faulty accounting practices shattered investor confidence in auditors throughout the country and made way to Serbians-Solely Act of 2002 and the creation of Public Company Accounting Oversight Board (PEPCO) to oversee the rule-making process for independent audit function.Anderson provided external auditing, internal auditing and consulting services to Enron. They violated several of their professional and ethical standards by accepting large suns in fees and perhaps by looking the other way to the faulty accounting practices contemplated by Enron's management ND giving them an unqualified audit opinion on the financial statements. Andersen earned around $52 million from Enron during 2000, but only $25 million was payment in reference to the 2000 audit. With such an involvement in non-audit services they were not independent of the company, violating the most important standard of auditing.They put their own interest before the interest of the users of their audited financial statements and opinion. From the excerpts it can be concluded that they were deeply involved in the accounting and structuring of the Esp., where they were more interested in electing millions of dollars in fees and failed to provide objective accounting judgment that should have prevented these transactions from going forward. Andersen failed to bring to the attention of Enron internal Audit and Compliance Committee about the serious reservations brought on internally about the related-party transactions, I. . Esp., which clearly shows the violation of professional auditing standards. Anderson firm should have supervised the auditing services provided by its auditors to maintain independence. This lacks of planning and supervision made Anderson to be highly involved in client accounting and financial porting decisions. Anderson had concerns about the disclosures of the related third-party transactions in the financial statement footnotes and instead of pointing those out to the Audit and Compliance Committee they vouched on its accuracy and issued an unqualified opinion on the financial. Enron Case Study Executive Summary: As per requested this group assignment prepared from Group 2 (NASA) contributed by Norazman Saharum , Shaufi Akil , Abd Manaf Jalil and Zubir Zainal Abidin . This group assignment part of final course entitle for 25 marks . This assignment to fulfill our MSU MBA Syllabus for subject Accounting For Corporate and Evaluation (DAC 5013) instructed by Dr Mazlinah Mat Zain . Our group have chosen The Arthur Andersen Troubles. The most famous scandal case Arthur Anderson scandal was involved in was the fraudulent auditing of Enron. In this case Arthur Anderson shredded vital documents sourcing the audit of Enron which occurred in the year 2002. Enron has clearly done some damage to the U. S. economy, but it will not hold up recovery from the current recession. The fundamental health of the U. S. economy is strong and now getting stronger. Some individual new economy companies will have depressed stock prices for some time, but they, too, will recover as they demonstrate that they are prepared to prevent Enron-like behaviour. We do believe Enron will be the morality play of the new economy. It will teach executives and the American public the most important ethics lessons of this decade. We will discuss more information on this issues based on the question given on Arthur Andersen and among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. Lastly, we would like to thanks to Dr Mazlinah on her dedicated and helpful to achieve our mission and mission to be a successful entrepreneur for the future. Arthur Andersen case study reminds us the most important ethics lessons of this decade. AMIN. Introduction; Arthur Andersen LLP, based in Chicago, was once one the â€Å"Big Five† accounting firms among Price Water House Coopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG , providing auditing, tax, and consulting services to large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accounting in the United States after being found guilty of criminal charges relating to the firm’s handling of the auditing of Enron, the energy corporation, resulting in the loss of 85,000 jobs. In this case Arthur Andersen shredded the vital documents sourcing the audit of Enron which occurred in the year 2002 . Although the verdict was subsequently overturned by the Supreme Court of the United States, it has not returned as a viable business. However, how did this company get the reputation that it has while following such a moral slogan? As the clients demanded for more profit margins , Arthur Andersen scandal had to compromise his morality leading to the allegation that he had fraudulently altered the statement of such companies and corporation for example Sunbeam Products, Waste Management Inc. , Asia Pulp and Paper, The Baptist Foundation of Arizona , and WorldCom . Due to the downfall of Arthur Andersen, it lost nearly all of its business and clients. It lost not millions but billions of dollars due to this intense investigation. Although it is still in business and operating under Omega Management and has not as of yet declared bankruptcy, the firm will never reach its past legacy. Arthur Anderson's motto of â€Å"Think straight, talk straight† has forever been tainted in the eyes of Americans corporations. This devastation of fraudulent activity has forever left a deep and painful scar on America’s businesses. . The Arthur Andersen’s Troubles: Question 1: What did Arthur Andersen (AA) contribute to the Enron disaster? The most famous scandal case Arthur Andersen was involved in was the fraudulent auditing of Enron. In this case Arthur Andersen shredded vital documents sourcing the audit of Enron which occurred in the year 2002. According to Watkin, a financial executive who worked with Andrew Fastow told Enron CEO Kenneth Lay she feared that Enron would â€Å"implode in a wave of accounting audit scandal â€Å" (1: USA Today, Wed, Jan 16, 2002) AA apparent mistakes may have been made for several reasons to the Enron disaster including: †¢ Incompetence , as displayed and admitted in the rhythms case . Judgement errors; . as to the significants of each of the audit findings, or of the aggregate impact in any fiscal year. †¢ Lack of information caused by Enron staff not providing critical information, or failure on the part of AA personal to search it out . †¢ Time pressures :related to revenue generations and budget pressures that prevented adequate audit work and the full considera tions of complex SPE and prepay financial arrangements . †¢ Desire not to confront Enron management or advise the Enron board in order not to upset management, and particularly fastow, Skilling and Lay Lack of Independence. The Board of Directors failed to ensure the independence of the company auditor , allowing AA to provide internal audit and consulting services while serving the Enron outside auditors . †¢ A failure of AA’s internal policies whereby the concerns of a quality control or practice standards partner can and was overruled by the audit partner in charge of the Enron account. AA was the only one of the Big 5 accounting forms to have this flaw and it left the entire firm vulnerable to the decisions of the person with the most to lose by saying no to a client. A misunderstanding of the fiduciary role required by auditors . for example AA allowing Enron to engage in high risk accounting , inappropriate conflict of interest transactions, extensive undisclo sed off-the-books activities and excessive executive compensation . Given this â€Å"tone at the top’. It is reasonable to assume that AA partners were going to be motivated by revenue generations. But if too many risks are taken in the pursuit of revenue the probability of a series of audit problems leading to increasingly unfavorable consequences becomes greater . That is exactly what happened to Enron disaster. Unfortunately, the leaders of AA failed to recognize the cumulative degree to which the public, the politicians, and the SEC (The Securities and Exchange Commission) were angered by the progression of AA audit failures . Question 2: What Arthur Andersen (AA) decision were faulty? Arthur Andersen (AA) decision were faulty . This is the ‘ Enron Debacle† section presented previously covers in detail many of the questionable accounting transactions, legal structures, and related disclosures that AA reviewed as auditors of and consultants to Enron. AA faulty may have been made for several reason , including: †¢ AA apparently approved as auditors and consultants (and collected fees for the consulting advice) the structure of many special purpose entities (SPEs) that were used to generate false profits, hide losses, and keep financing off Enron’s consolidated financial statements , failed to meet the required outsiders 3 percent equity at risk, and decision control criteria for non consolidation . AA failed to recognize the generally accepted accounting principle (GAAP) that prohibits the recording of shares issued as an increase in shareholders’ equity unless they are issued for cash . †¢ AA did not advise Enron’s audit committee that Andrew Fastow, Enron’s CFO and his helpers were involved in significant conflict of interest situations without adequate alternative means of managing these conflicts. †¢ AA did not advise the Enron audit committee that Enron’s policies and internal control were not adequate to protect the shareholders’ interests even though AA had assumed Enron’s internal audit functions . Many transactions between Enron and the SPEs were not in the interest of Enron shareholders since: a) Enron profits and cash flow were manipulated and grossly inflated, misleading investors and falsely boosting management bonus arrangements. b) Extraordinarily overgenerous deals, fees, and liquidation arrangements were made by Fastow, or under his influence, with SPEs owned to Fastow , his family, and Kopper, who was also as employee of Enron . AA aparently did not adequately consider, the advice of its quality control partner, Carl Bass. He asked AA for an accounting change that would have resulted in a $30 – $50 million charge to Enron’s earnings. †¢ AA apparently did not find significant audit evidence, or did not act upon evidence found, related to the: 1)Mistaken valuation of shares or share rights transferred to SPEs 2 )Side deals between Enron and banks removing the bank’s risk from transactions such as the : a) Chewco SPE Rhythms hedge. ) Numerous prepay deals for energy futures, even though AA made a presentations to Enron on the GAAP and AA requirements that preclude such arrangements. Questions 3: What was the prime motivation behind the decision of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management the public interest or†¦? Cite examples that reveal this motivation . The AA was motivated by greed instead of serving the public interest. The amount of money they got from the consulting fee has compromised their auditing works. In 1997, client Waste Management Inc. had the largest earnings restatement to date, wiping out $1. 7 billion in profits that it pulled in through the 1990s. The lead auditor on Waste Management was Robert Allgyer, who was known inside the firm as â€Å"the Rainmaker† for his success in cross-selling extra services to auditing clients. He was clearly successful at selling to Waste Management, which paid $17. 8 million in fees unrelated to the audit between 1991 and 1997, against audit fees of $7. 5 million. But he was also signing off on drastically inaccurate books. Among other things, the fast-growing trash hauler wasn't properly writing off the value of assets such as garbage trucks as they aged, a ruse that pumped up reported profits. The SEC's acting commissioner, Laura Unger, concluded that the agency had the â€Å"smoking gun† it was looking for to prove that the lure of consulting fees compromised auditor independence. The SEC filed suit in March 2002, accusing six former Waste Management executives of fraud. It alleges that Mr. Allgyer's judgment was skewed by consulting fees, in particular a $3. 7 million â€Å"strategic overview† of Waste Management operations. The project lasted for 11 months, but the client didn't adopt the recommendations. Bellow table shown example AA’s involvements in the major financial scandals as the audit firm that failed to discover their mistakes that reveal this motivation: |CLIENT |PROBLEM MISSED, DATE |LOSSES TO SHAREHOLDERS |JOB LOSSES |AA FINE | |WorldCom |$4. billion overstatement of |4179. 3 Million |17,000 |N. A | | |earnings announced on June 25,| | | | | |2002 | | | | | | | | | | | |Inflation of ncome, asset, | | | | | |etc bankrupt Dec 2, 2001 | | | | |Enron | |$66. 4 Billion |6,100 |$. 5 Million | | |Overstatement of income by | | |(for shredding) | | |$1. billion, 1992-1996 | | | | | | | | |$7 Million | | | | | | | |Waste Management | |420. 5 Billion |11,000 | | Question 7: Under what circumstances should audit firm shred or destroy working paper ? According to section 802 of the Sarbanes-Oxley Act of 2002, accountants who audit or review an issuer's financial statements are required to retain certain records relevant to that audit or review. These records include workpapers and other documents that form the basis of the audit or review, and memoranda, correspondence, communications, other documents, and records (including electronic records), which are created, sent or received in connection with the audit or review, and contain conclusions, opinions, analyses, or financial data related to the audit or review. To coordinate with forthcoming auditing standards concerning the retention of audit documentation, the rule requires that these records be retained for seven years after the auditor concludes the audit or review of the financial statements. Refer to the above question, for example if we as a professional audit firm can’t simply shred or destroy working paper. How long to keep a document, when and how to store the document, and how to dispose of the document, will depend on the type of document . As any internal auditor knows, there are numerous types of documents that may be accumulated as part f an audit or review. The final rule here requires the retention of all records relevant to the audit, including working papers and other documents that form the basis of the audited financial statements, as well as certain supporting documents. The guideline for document retention is that they must meet two criteria: (1) Documents are created, sent, or received in connection with the a udit or review, (2) the documents contain conclusions, opinions, analyses, or financial data related to the audit or review. Both Enron and Arthur Andersen are now gone, but this audit work-paper clean-up exercise, no doubt, was a major motivating factor for the Sarbanes-Oxley Act , Section 802 rules outlining penalties for the destruction of documents. The rules require external auditors who audit or review an enterprise's financial statements to retain certain records relevant to that work, including work papers and other documents that form the basis of the audit or review. These retention requirements include memoranda, correspondence, communications, other documents, and records, as well as related electronic records that are created, sent, or received in connection with the audit work and contain conclusions, opinions, analyses, or financial data related to the work. These records are to be retained for seven years after the auditor concludes the financial statements review. This rule was nothing new for many internal auditors as many audit functions have followed similar document retention rules based on U. S. tax document retention guidelines. The rules also states that if you know your company is under investigation, or even suspect that it might be, all document destruction and alteration must stop immediately. And, you must create a company records showing that you’ve ordered a halt to all automatic e-data destruction practices. Question 8: Answer the â€Å"Lingering Question† on page 94 . Enron has clearly done some damage to the U. S. economy, but it will not hold up recovery from the current recession. The fundamental health of the U. S. economy is strong and now getting stronger. I do believe Enron will be the morality play of the new economy. It will teach executives and the American public the most important ethics lessons of this decade. Among these lessons are: 1. You make money in the new economy in the same ways you make money in the old economy – by providing goods or services that have real value. 2. Financial cleverness is no substitute for a good corporate strategy. . The arrogance of corporate executives who claim they are the best and the brightest, â€Å"the most innovative,† and who present themselves as superstars should be a â€Å"red flag† for investors, directors and the public. 4. Executives who are paid too much can think they are above the rules and can be tempted to cut ethical corners to retain their wealth and perquisites. 5. Government regulations and rules need to be updated for the new economy, not relaxed and eliminated. Due to the downfall of Arthur Anderson, it lost nearly all of its business ,employees, and clients. It lost not millions but billions of dollars due to this intense investigation. Although it is still in business and operating under Omega Management and has not as of yet declared bankruptcy, the firm will never reach its past legacy. We believe accounting regulations should be altered to prohibit ownership of both auditing and consulting services by the same accounting firm. Accounting firms are already moving to sever their consulting businesses. The SEC should probably adopt additional disclosure requirements. Various regulators should tighten requirements for directors to be alert and provide protections for whistleblowers who bring improper behaviour to public attention. But, in the final analysis, the solution to an Enron-type scandal lies in the attentiveness of directors and in the truthfulness and integrity of executives. Clever individuals will always find ways to conceal information or to engage in fraud. Enron Case Study Executive Summary: As per requested this group assignment prepared from Group 2 (NASA) contributed by Norazman Saharum , Shaufi Akil , Abd Manaf Jalil and Zubir Zainal Abidin . This group assignment part of final course entitle for 25 marks . This assignment to fulfill our MSU MBA Syllabus for subject Accounting For Corporate and Evaluation (DAC 5013) instructed by Dr Mazlinah Mat Zain . Our group have chosen The Arthur Andersen Troubles. The most famous scandal case Arthur Anderson scandal was involved in was the fraudulent auditing of Enron. In this case Arthur Anderson shredded vital documents sourcing the audit of Enron which occurred in the year 2002. Enron has clearly done some damage to the U. S. economy, but it will not hold up recovery from the current recession. The fundamental health of the U. S. economy is strong and now getting stronger. Some individual new economy companies will have depressed stock prices for some time, but they, too, will recover as they demonstrate that they are prepared to prevent Enron-like behaviour. We do believe Enron will be the morality play of the new economy. It will teach executives and the American public the most important ethics lessons of this decade. We will discuss more information on this issues based on the question given on Arthur Andersen and among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. Lastly, we would like to thanks to Dr Mazlinah on her dedicated and helpful to achieve our mission and mission to be a successful entrepreneur for the future. Arthur Andersen case study reminds us the most important ethics lessons of this decade. AMIN. Introduction; Arthur Andersen LLP, based in Chicago, was once one the â€Å"Big Five† accounting firms among Price Water House Coopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG , providing auditing, tax, and consulting services to large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accounting in the United States after being found guilty of criminal charges relating to the firm’s handling of the auditing of Enron, the energy corporation, resulting in the loss of 85,000 jobs. In this case Arthur Andersen shredded the vital documents sourcing the audit of Enron which occurred in the year 2002 . Although the verdict was subsequently overturned by the Supreme Court of the United States, it has not returned as a viable business. However, how did this company get the reputation that it has while following such a moral slogan? As the clients demanded for more profit margins , Arthur Andersen scandal had to compromise his morality leading to the allegation that he had fraudulently altered the statement of such companies and corporation for example Sunbeam Products, Waste Management Inc. , Asia Pulp and Paper, The Baptist Foundation of Arizona , and WorldCom . Due to the downfall of Arthur Andersen, it lost nearly all of its business and clients. It lost not millions but billions of dollars due to this intense investigation. Although it is still in business and operating under Omega Management and has not as of yet declared bankruptcy, the firm will never reach its past legacy. Arthur Anderson's motto of â€Å"Think straight, talk straight† has forever been tainted in the eyes of Americans corporations. This devastation of fraudulent activity has forever left a deep and painful scar on America’s businesses. . The Arthur Andersen’s Troubles: Question 1: What did Arthur Andersen (AA) contribute to the Enron disaster? The most famous scandal case Arthur Andersen was involved in was the fraudulent auditing of Enron. In this case Arthur Andersen shredded vital documents sourcing the audit of Enron which occurred in the year 2002. According to Watkin, a financial executive who worked with Andrew Fastow told Enron CEO Kenneth Lay she feared that Enron would â€Å"implode in a wave of accounting audit scandal â€Å" (1: USA Today, Wed, Jan 16, 2002) AA apparent mistakes may have been made for several reasons to the Enron disaster including: †¢ Incompetence , as displayed and admitted in the rhythms case . Judgement errors; . as to the significants of each of the audit findings, or of the aggregate impact in any fiscal year. †¢ Lack of information caused by Enron staff not providing critical information, or failure on the part of AA personal to search it out . †¢ Time pressures :related to revenue generations and budget pressures that prevented adequate audit work and the full considera tions of complex SPE and prepay financial arrangements . †¢ Desire not to confront Enron management or advise the Enron board in order not to upset management, and particularly fastow, Skilling and Lay Lack of Independence. The Board of Directors failed to ensure the independence of the company auditor , allowing AA to provide internal audit and consulting services while serving the Enron outside auditors . †¢ A failure of AA’s internal policies whereby the concerns of a quality control or practice standards partner can and was overruled by the audit partner in charge of the Enron account. AA was the only one of the Big 5 accounting forms to have this flaw and it left the entire firm vulnerable to the decisions of the person with the most to lose by saying no to a client. A misunderstanding of the fiduciary role required by auditors . for example AA allowing Enron to engage in high risk accounting , inappropriate conflict of interest transactions, extensive undisclo sed off-the-books activities and excessive executive compensation . Given this â€Å"tone at the top’. It is reasonable to assume that AA partners were going to be motivated by revenue generations. But if too many risks are taken in the pursuit of revenue the probability of a series of audit problems leading to increasingly unfavorable consequences becomes greater . That is exactly what happened to Enron disaster. Unfortunately, the leaders of AA failed to recognize the cumulative degree to which the public, the politicians, and the SEC (The Securities and Exchange Commission) were angered by the progression of AA audit failures . Question 2: What Arthur Andersen (AA) decision were faulty? Arthur Andersen (AA) decision were faulty . This is the ‘ Enron Debacle† section presented previously covers in detail many of the questionable accounting transactions, legal structures, and related disclosures that AA reviewed as auditors of and consultants to Enron. AA faulty may have been made for several reason , including: †¢ AA apparently approved as auditors and consultants (and collected fees for the consulting advice) the structure of many special purpose entities (SPEs) that were used to generate false profits, hide losses, and keep financing off Enron’s consolidated financial statements , failed to meet the required outsiders 3 percent equity at risk, and decision control criteria for non consolidation . AA failed to recognize the generally accepted accounting principle (GAAP) that prohibits the recording of shares issued as an increase in shareholders’ equity unless they are issued for cash . †¢ AA did not advise Enron’s audit committee that Andrew Fastow, Enron’s CFO and his helpers were involved in significant conflict of interest situations without adequate alternative means of managing these conflicts. †¢ AA did not advise the Enron audit committee that Enron’s policies and internal control were not adequate to protect the shareholders’ interests even though AA had assumed Enron’s internal audit functions . Many transactions between Enron and the SPEs were not in the interest of Enron shareholders since: a) Enron profits and cash flow were manipulated and grossly inflated, misleading investors and falsely boosting management bonus arrangements. b) Extraordinarily overgenerous deals, fees, and liquidation arrangements were made by Fastow, or under his influence, with SPEs owned to Fastow , his family, and Kopper, who was also as employee of Enron . AA aparently did not adequately consider, the advice of its quality control partner, Carl Bass. He asked AA for an accounting change that would have resulted in a $30 – $50 million charge to Enron’s earnings. †¢ AA apparently did not find significant audit evidence, or did not act upon evidence found, related to the: 1)Mistaken valuation of shares or share rights transferred to SPEs 2 )Side deals between Enron and banks removing the bank’s risk from transactions such as the : a) Chewco SPE Rhythms hedge. ) Numerous prepay deals for energy futures, even though AA made a presentations to Enron on the GAAP and AA requirements that preclude such arrangements. Questions 3: What was the prime motivation behind the decision of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management the public interest or†¦? Cite examples that reveal this motivation . The AA was motivated by greed instead of serving the public interest. The amount of money they got from the consulting fee has compromised their auditing works. In 1997, client Waste Management Inc. had the largest earnings restatement to date, wiping out $1. 7 billion in profits that it pulled in through the 1990s. The lead auditor on Waste Management was Robert Allgyer, who was known inside the firm as â€Å"the Rainmaker† for his success in cross-selling extra services to auditing clients. He was clearly successful at selling to Waste Management, which paid $17. 8 million in fees unrelated to the audit between 1991 and 1997, against audit fees of $7. 5 million. But he was also signing off on drastically inaccurate books. Among other things, the fast-growing trash hauler wasn't properly writing off the value of assets such as garbage trucks as they aged, a ruse that pumped up reported profits. The SEC's acting commissioner, Laura Unger, concluded that the agency had the â€Å"smoking gun† it was looking for to prove that the lure of consulting fees compromised auditor independence. The SEC filed suit in March 2002, accusing six former Waste Management executives of fraud. It alleges that Mr. Allgyer's judgment was skewed by consulting fees, in particular a $3. 7 million â€Å"strategic overview† of Waste Management operations. The project lasted for 11 months, but the client didn't adopt the recommendations. Bellow table shown example AA’s involvements in the major financial scandals as the audit firm that failed to discover their mistakes that reveal this motivation: |CLIENT |PROBLEM MISSED, DATE |LOSSES TO SHAREHOLDERS |JOB LOSSES |AA FINE | |WorldCom |$4. billion overstatement of |4179. 3 Million |17,000 |N. A | | |earnings announced on June 25,| | | | | |2002 | | | | | | | | | | | |Inflation of ncome, asset, | | | | | |etc bankrupt Dec 2, 2001 | | | | |Enron | |$66. 4 Billion |6,100 |$. 5 Million | | |Overstatement of income by | | |(for shredding) | | |$1. billion, 1992-1996 | | | | | | | | |$7 Million | | | | | | | |Waste Management | |420. 5 Billion |11,000 | | Question 7: Under what circumstances should audit firm shred or destroy working paper ? According to section 802 of the Sarbanes-Oxley Act of 2002, accountants who audit or review an issuer's financial statements are required to retain certain records relevant to that audit or review. These records include workpapers and other documents that form the basis of the audit or review, and memoranda, correspondence, communications, other documents, and records (including electronic records), which are created, sent or received in connection with the audit or review, and contain conclusions, opinions, analyses, or financial data related to the audit or review. To coordinate with forthcoming auditing standards concerning the retention of audit documentation, the rule requires that these records be retained for seven years after the auditor concludes the audit or review of the financial statements. Refer to the above question, for example if we as a professional audit firm can’t simply shred or destroy working paper. How long to keep a document, when and how to store the document, and how to dispose of the document, will depend on the type of document . As any internal auditor knows, there are numerous types of documents that may be accumulated as part f an audit or review. The final rule here requires the retention of all records relevant to the audit, including working papers and other documents that form the basis of the audited financial statements, as well as certain supporting documents. The guideline for document retention is that they must meet two criteria: (1) Documents are created, sent, or received in connection with the a udit or review, (2) the documents contain conclusions, opinions, analyses, or financial data related to the audit or review. Both Enron and Arthur Andersen are now gone, but this audit work-paper clean-up exercise, no doubt, was a major motivating factor for the Sarbanes-Oxley Act , Section 802 rules outlining penalties for the destruction of documents. The rules require external auditors who audit or review an enterprise's financial statements to retain certain records relevant to that work, including work papers and other documents that form the basis of the audit or review. These retention requirements include memoranda, correspondence, communications, other documents, and records, as well as related electronic records that are created, sent, or received in connection with the audit work and contain conclusions, opinions, analyses, or financial data related to the work. These records are to be retained for seven years after the auditor concludes the financial statements review. This rule was nothing new for many internal auditors as many audit functions have followed similar document retention rules based on U. S. tax document retention guidelines. The rules also states that if you know your company is under investigation, or even suspect that it might be, all document destruction and alteration must stop immediately. And, you must create a company records showing that you’ve ordered a halt to all automatic e-data destruction practices. Question 8: Answer the â€Å"Lingering Question† on page 94 . Enron has clearly done some damage to the U. S. economy, but it will not hold up recovery from the current recession. The fundamental health of the U. S. economy is strong and now getting stronger. I do believe Enron will be the morality play of the new economy. It will teach executives and the American public the most important ethics lessons of this decade. Among these lessons are: 1. You make money in the new economy in the same ways you make money in the old economy – by providing goods or services that have real value. 2. Financial cleverness is no substitute for a good corporate strategy. . The arrogance of corporate executives who claim they are the best and the brightest, â€Å"the most innovative,† and who present themselves as superstars should be a â€Å"red flag† for investors, directors and the public. 4. Executives who are paid too much can think they are above the rules and can be tempted to cut ethical corners to retain their wealth and perquisites. 5. Government regulations and rules need to be updated for the new economy, not relaxed and eliminated. Due to the downfall of Arthur Anderson, it lost nearly all of its business ,employees, and clients. It lost not millions but billions of dollars due to this intense investigation. Although it is still in business and operating under Omega Management and has not as of yet declared bankruptcy, the firm will never reach its past legacy. We believe accounting regulations should be altered to prohibit ownership of both auditing and consulting services by the same accounting firm. Accounting firms are already moving to sever their consulting businesses. The SEC should probably adopt additional disclosure requirements. Various regulators should tighten requirements for directors to be alert and provide protections for whistleblowers who bring improper behaviour to public attention. But, in the final analysis, the solution to an Enron-type scandal lies in the attentiveness of directors and in the truthfulness and integrity of executives. Clever individuals will always find ways to conceal information or to engage in fraud.

Organizational Culture of Virgin Group Essay

1. Describe the culture of Virgin group by seven dimension of organization culture. Organizational culture has been described as the shared values, principles, traditions, and ways of doing things that influence the way organizational members act. Actually, it can divided seven dimension of organizational culture which are attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, stability and innovation and risk taking, and now I will use these seven dimensions to describe the culture of virgin. The first dimension used in this culture of virgin is attention to detail. It is the degree to which employees are expected to exhibit precision, analysis, and attention to detail. It is such a culture gives a competitive advantage to companies by helping them differentiate themselves from others. Like this article, the virgin airline has a lot of competitors like 747airline. They provide heterogeneous products and the virgin airline put their selling point to their services that their crews are smiling, cheerful and pleased to help, let the passengers wanting to fly with them again. Also, the virgin America sweeps the travel awards for service and quality. Although their planes are new, with great interiors and entertainment, the great service of its crews is what wins so many plaudits. Furthermore, they employ a general manager in the Caribbean. He tried to change the way things were done, discouraged the staff from drinking their guests that reducing the staff morale. As he didn’t get the degree on attention to detail, then he was being replacement. The second dimension in this culture is people orientation. It is the degree to which management decisions take into account the effects on people in the organization. It emphases on individual rights and expectation of treating people with respect and dignity. In this article, when the author was running Virgin Records, a member of the talent-scouting team was stealing and selling boxes of records to local secondhand shops. But he didn’t fire the staff and just gave him a severe warning and a second chance. He expected the staff to learn from his mistake and get back to doing his job. As the experience of the author that he fell foul of the customs and excise people as trying to bring records into the UK. He was given a fine, a second chance and have tried to make the most of it ever since. This has made him much more accepting and forgiving of people’s mistakes. Also, the virgin airline treats their staff as family units and makes them feel that their company is their second home. They will hold parties in the weekend, make sure all the staff can participate the parties and help them build the relationship between staff and manager. That is how the virgin airline treating their staff. The third dimension in this culture is team orientation. It is a degree to which work is organized around teams rather than individuals. It is collaborative and emphases on cooperation among employees. In this article, the writer mentioned about how to be a good leader to lead people well. He said that a good leader must know the team, its strengths and weakness; socializing and listen to the team is the key of being a good leader. A good leader can led their teammate well, can motivate the staff morale and build the relationship between the team. He also said that a bad leader can destroy a business very quickly. As they employed a general manager in Caribbean who tried to change the way things were done. The manager discouraged the staff from drinking with guests that decreased the staff morale and broke the trust of management. So they replace the manager and restore the staff morale and the sense of management’s trust which had been broken. The fourth dimension in this culture is innovation and risk taking. It is the degree to which employees are encouraged to be innovative and take risk. Through this article, Brett Godfrey showed his business plan to the author, which outlining the start-up of a low-cost carrier in Australia to take on Qantas and Ansett in their domestic market. He has expanded Blue and its sister airline to the United States, New Zealand, Thailand and South Africa. The company give them brand support and the space to go build the new business themselves like Virgin Active. Also, Matthew Bucknall and Frank Reed had bought out some innovative idea like the idea of a family-friendly health and fitness club in 1999. These planning and ideas are innovative, but at the same time they need to take the risk on running the ideas and planning. In this article, we can find out four dimension of organizational culture. A top company must have strong organizational culture that employees are more loyal than weak organizational culture, creates a stronger employee commitment to the organization, and the strong organizational culture is associated with high organizational performance. Also, if the value of the culture is clear and widely accepted, employees can know what they are supposed to do and what expected to them, so they can act quickly to take care of problem. 2. How culture affect the manager? A culture usually reflects the vision of organization founder. They will articulate the vision of what they want the organization to be. The small size of most new organizations makes it easier to instill the vision with all organizational members. Also, organizational practices are also one of the impacts on culture. They can find out the information about the organization and determine the most suitable for organization through practices. The top management behavior has a major impact on culture too, that the action of top management can lead to undesirable outcomes. Organizational culture can divide into four types. They are open systems, human relation, internal process and rational goal. A culture will predominately affect the manger in four ways, which are controlling, leading, organizing and planning. In the leading of the management, the mangers are able to use democratic leadership style that allows employees participate in decision-making progress, but not only individuals in the open systems and human relation culture. Through these two types of culture, the mangers require visionary leadership, responsive behavior and also tend to be participative, considerate and supportive. Also, the mangers in rational goal culture are also able to use democratic leadership style and tend to be directive, goal oriented and functional. On the other hand, the mangers in the internal process culture will be more likely to use autocratic leadership style that they are tend to be conservative and caution. In the planning of the management, they will more likely to take the risk of the plan in open systems culture in the large extent, which this culture is emphasis on creativity and innovation that the employee will have some innovative idea when planning. In rational goal and human relation culture, the manger will take risk on planning in the small extent. But in the internal process culture, the manger are not willing to take the risk on planning, which their company are conservative and cautious. In the human relation and open system culture, they will likely develop the plan by team, but the mangers will likely develop the plan by individual in the rest of the cultures. In the controlling of managers, the control system will be more flexible in human relation and open systems culture, which likely allow employees to control their own action. But in the rest of the cultures, the control system will be inflexible that the managers need their employees follow their rules and procedures. In the open system culture, the manager may able to take the risk to produce the product if exceeding the budget. On the other hand, the manager in internal process culture will prefer cutting the cost or will not produce the product rather than taking the risk to release the product into the market. In the organizing of the mangers, their employees can have more autonomy in their jobs in the human relation and open system culture, but less autonomy of employees in the rest of the cultures. Through the rational goal and internal process culture, they will be able done their task by individual rather than team. On the other hand, in human relation and open system, they will prefer to finish the task by team compare to individual and their manager will be likely being decentralization, that increase the decision-making authority of employees, but the rest of culture not. A culture will affect the mangers what they can or cannot do and how they manage. A good manger should know the culture of their companies deeply, that can help them to know what to do and not do and identify their role on managing a team or company.

Company Law Liquidation

Brown brothers Brakes LTD has invested large amount in producing a range of products for supermarkets. The company is facing financial difficulties due to unsuccessful. In that situation director fear the company may now be insolvent. The accountant now wants to understand the issues surrounding insolvency. According to Brown Bothers current situation it has been recommended to their director to follow the following issues. Insolvency A company which is insolvent may be put into liquidation sometimes referred to as winding-up. Insolvency means the inability to pay one's debts as they fall due. Insolvency refers to the inability of a company to pay off its debts. Administration This occurs when a company which is in financial difficulty is put into the hands of an administrator. An administrator is appointed as an officer of the court and an agent of the company by qualified Floating Charge Holder and must act in the interests of all the creditors and attempt to rescue the company as a going concern or more often if they can get a better price for assets than immediate liquidation would give. In general it is a process that happens when company face financial difficulties. He will be working for companies interest, in order to pay out companies all creditors they can take any decision such as if it is profitable to keep running the company or sell in profitable price and pay to its creditors. An administrator may be appointed by court order issued from court or qualified charge holder and directors of the company. As soon as an administrator has appointed any pending winding-up petitions will be suspended. Enterprise act 2002 came into force 15th September 2003 section 72/A explain prohibition of appointment of administrative receiver. The law emphasise that qualified floating charge holder appoints administrator rather than receiver. Once an administrator has been appointed must send a notice of his or her appointment to the company and each of its creditors and publish notice of his or her appointment in the Gazette( The Gazette is the official newspaper of record which contains various statutory notices and advertisements, it is published twice weekly and can be obtained from the Edinburg company house) and in a newspaper in the area where the company has its principal place of business. Administration receivership Floating charges registered before 15th September 2003 are governed by Insolvency Act 1986 section 50-70 and Insolvency Scotland rules 1986. Receivers are appointed under the terms of the floating charge. Their task is to ingather assets caught by the floating charge and repay the charge holder. A receiver may be appointed for the various following reasons: * Any event which charge entitles holder to appoint a receiver. * 21 days after demanding payment . * Interest in arrears for 2 months not paid. * Order/resolution to wind up company . * Appointment of a receiver under another floating charge . Duties of the receiver Ascertains assets caught by floating charge and realises them. Receiver pays the preferential debts IA 1986, he also pays the amount due to the charge holder and any balance is returned to company. Within 7 days of the appointment, the person who appoints the receiver must deliver notice to the Registrar of Companies for Scotland and AIB (Accountant in Bankruptcy). When the receiver ceases to act, the holder of the floating charge must deliver notice to the Registrar of Companies for Scotland and AIB within 14 days. Within 3 months of his appointment, the receiver must deliver a report to AIB with copies to the creditors of the company and the holders of a floating charge as well as the any trustees for secured creditors of the company. Liquidation Liquidation is a process when company can't pay debts and liabilities, then A liquidator is appointed either by creditor or the members to wind up the company in order to sell companies assets and pay the creditors. There are two types of liquidation, one is the voluntary liquidation and the other is compulsory liquidation. Voluntary liquidation Voluntary liquidation occurs when the members of the company resolve to voluntarily wind-up the affairs of the company and dissolve. If the company is solvent, and the members have made a statutory declaration of solvency, the liquidation will proceed as a members' voluntary winding-up. This takes place at a General Meeting. Companies Registrar and Gazette must be advised of it. Member Voluntary liquidation A member voluntary liquidation means that the company is solvent and can pay in full a creditors. Which case preferential creditors are paid first, in full if possible then ordinary creditors will be paid if sufficient funds are available. Creditor Voluntary liquidation Creditors voluntary liquidation is most common methods to closing down insolent company. This method is applied when share holders want to wind up a company. Any actions have planned at creditors meeting. As a normal process liquidator is appointed to wind up company and release assets in order to pay creditors balance. At the end company directors lose their power. Compulsory Liquidation Compulsory liquidation of a company is when the company is ordered by a court to be wound up. The Court of Session, or Sheriff Court with the appropriate jurisdiction, may order the winding-up of a company. This may be, for example, on the petition of a creditor or creditors on the grounds that the company cannot pay its debts. It has to be advertised in Gazette. A provisional liquidator may be appointed after petition is presented. After court order interim liquidator is appointed. An official liquidator has appointed after meeting of all creditors and contributors. Then in essence same as for voluntary. Fraudulent ; Wrongful Trading Fraudulent trading is where a company carries on a business with the intention of defrauding creditors or for any fraudulent purposes. Where during the course of a winding-up it appears to the liquidator that fraudulent trading has occurred, the liquidator may apply to the court for an order any persons who were knowingly parties to the carrying on of such business are to be made liable to make such contributions to the company's assets as the court thinks proper. If there is suspect of fraudulent trading following people should informed: * Alert the liquidator if applicable. Reference http://www.companieshouse.gov.uk/about/gbhtml/gpo8s.shtml#ch8

Effective Time Management Essay

Through the use of modern technology, businesses have an easier way of collaboration. However, with this easier method of collaboration, this means the potential of being a busier business professional. Within a business management system, there is the constant need of needing to have effective time management within the organization. A key priority to effective time management is to identify and correct time wasters. One type of time wasters is an external environment. External time wasters are interactions that occur between two business professionals. The interactions can be between anyone outside and inside the organization, regardless of who it is within the organization (co-workers, managers, business partners, etc. ). A very common means of communication is the telephone. While telephones can be necessary for communicating, they can lead to distraction of issues that are not part of the core task or completely unnecessary (Cooper, 2000. )A key function of time management, regardless of the communication method is to make sure it affectively addresses the task of getting things done. In the case of inbound phone calls, it is imperative to thing and prioritizes as one speaks. When dealing with complex and time-consuming answers, the receiver of the inbound call should tell the caller about how the answer is complex. It is then important to determine from the caller when the receiver should call he or she back to discuss more of the complex answer. In addition it is imperative to paraphrase and summarize the key points while being on the phone. This serves two functions. One of them is that it keeps someone who either chats or strays away from important points of business communications. The second is that it focuses on establishing the key agenda for a business meeting. Another example of a common external environment distraction is email. For the busy business professional, there can be a time of literally going through hundreds of emails a day. When developing a simple and effective email reference system, it is necessary to understand the difference between reference information and action information. Reference information refers to receiving emails that are not required to complete an action. The purpose of reference information is the storing of emails that can be used later (Sapadin, 2006. ) The stored emails can either be an email folder or somewhere easily accessible (such as a documents folder, intranet site, etc. ) Action information is emails that are necessary for completing a task or project. These types of information are stored in a to-do list or a scheduled calendar. In order to effectively communicate via email, it is fundamental to have an easy method of transferring messages from the email inbox into an email reference system. Once there is a successful way of filing referenced information, emails that has an action item can be concentrated on. In addition to having an effective organizational system for email, it is necessary to schedule an uninterrupted time for processing and organizing email. When processing email, it is valuable to use the â€Å"Four Ds for Decision-Making† model. This tool is valuable for processing email and deciding if it is actionable, reference material, or not necessary. (Allen, 2001. )The 4D’s of the decision making model are deleting, doing, delegating, or defer it. With deleting, it can create the fear of deleting an email for important items. However, it is absolutely necessary to determine if the information is honestly usable for the email receiver. In order to determine if it is usable, the first step is to see if the objective is meaningful. The next step is to determine if the information is not available elsewhere. Then, it is to be determined if the information is to be used within the next six months. Finally, the last step is to determine if there is required information to keep. If the answers to all of these steps are â€Å"no,† the best action is to delete it. With the doing part of the 4D model, it is to be determined if an action can take less than two minutes. If it can, then the email receiver should simply complete the task. Delegating can yield to great help within the decision making model. If the task can take longer than two minutes and someone would be available to complete the task, it would be best to hand the message to the recipient. Let’s suppose that the email can’t involve doing, deleting or delegating it. Then, the next step would be to defer the task. Once deferring a message, it can be turned into either an actionable task or an appointment (which can be handled within an email suite such as Microsoft Outlook. ) Time wasters can also be within an internal environment. These characteristics can include procrastination, poor scheduling, and lack of self-discipline. It can also include failure to plan, set priorities, or delegate. The first step towards the right direction of internal time wasters is to set a goal. That way a destination is set in order to make the best use of time. When setting goals, they should be put in writing and reviewed frequently. From these goals, a daily â€Å"to-do† list should be used within the workplace. By referencing Italian economist Vilfredo Pareto’s 80/20 rule , 80 percent of what happens in the workplace is the result of 20 percent effort. This would mean by incorporating goals, someone can be 80 percent effective, by simply accomplishing completion for 20 percent of goals. In order to be effective, it is necessary to concentrate on the most important items first. When scheduling, a block of time should be reserved without interruption (Sandberg, 2004. ) With the power of habit, it makes accomplishing a to-do list more doable. When facing big projects, it is easier to break them into more manageable sizes. A common overlooked goal setting is to forget scheduling long-term goals. Those are also important as they relate to the health and relationship of individuals. In conclusion, sometimes saying â€Å"no† is needed when someone is overwhelmed to more jobs than he or she is committed to. References Allen, D. (2001). Getting things done: the art of stress-free productivity. New York: Viking. Cooper, C. L. , & Rousseau, D. M. (2000). Time in Organizational Behaviour. Chichester: Wiley. Sandberg, Jared â€Å"Though Time-Consuming, To-Do Lists Are a Way of Life†. 2004, September 10) The Wall Street Journal. Sapadin, L. (2006, August 30). Time management. Washingtonpost. com. Retrieved from http://go. galegroup. com. db24. linccweb. org/ps/i. do? id=GALE%7CA150674268 &v=2. 1&u=lincclin_spjc&it=r&p=AONE&sw=w

The challenges facing kindergarten teachers to deal with children whom Essay

The challenges facing kindergarten teachers to deal with children whom English is an addtional language - Essay Example I preferred these types of questions because they are useful in obtaining in-depth information on the research question. I purposely chose my participants based on two primary characteristics: 1) Were they teachers of kindergartens and 2) do they deal with children whom English is the second language. Upon introducing the research questions to a respondent, I gave out recent experiences of other teachers in other parts of the country along with the structured open-ended questions. The only delimitation in this data collection is that, the open-ended questionnaire did not collect the respondents’ first name, phone number, and the email address. In this case, I am unable to contact the respondents after the interview. Majority of the respondents were females. The females were 17 whereas the males were seven. Studies indicate that many people expect feminine touch from a kindergarten teacher (Rimer, 2003). Men keep away from this job because it offers low pay and continues to tag the profession as women’s work. The few men that teach kindergartens are regarded as insufficiently masculine, gays or even pedophiles! Majority of the respondents had a class size of 16 to 25 children. Four respondents had a class of 1 to 15 pupils, seven respondents had a class of 25 to 35 pupils, and the rest had a class of 16 to 25 pupils. Kindergartens prefer a medium classroom size, of about 20 to 30 students. According to studies, teachers of medium sized classes can increase learning and narrow the achievement gap between ethnic and racial groups (Haimson, 2003). Pupils whom English is an additional language assigned to medium sized classes have been proven to achieve English language proficiency, receive better grades, and exhibit improved attendance (Haimson, 2003). Despite students with EAL benefiting a lot from medium-sized classrooms, most of them are more likely to be enrolled in bigger classes, say over 25 pupils. Experts believe medium sized

From Buddha to his pupils Essay Example | Topics and Well Written Essays - 1000 words

From Buddha to his pupils - Essay Example I want you to be aware of the difference between being Buddhist and Buddhic. First of all, Buddhism is a philosophy, not a theology. In Jesus Christ you can find a theology, but in me you can find a philosophy than can be integrated into Christianism. To be Buddhist means to be a follower of Buddha.To be Buddhic means to be a little Buddha in miniature himself or herself. To be Christian means to be a follower of Christ. To be Christic means to be a little Christ in miniature. You have to know these distinctions. Buddhism is a path to stop suffering, but Christianism is a path to adore and worship God. You have to know how to integrate Buddhism and Christianism into one simple way of life. First you have to be Buddhist, then you have to be Christian. Then you have to be Buddhic, then you have to Christic. At the end you will be Buddhic-Christic. You will be a little Buddha-Christ in miniature. You will see that reincarnation is an evolutionary step to resurrection. You will see that reintegration with God or the Highest Being is in fact Universal Salvation. Follow the Four Noble Truths and read carefully the Bible. Integrating Buddhism as a philosophy and Christianism as a theology will guide you through the right path. The Four Noble Truths will guide to Christ. Christ will guide you to the Universal Father according to the Book of Urantia. You have to be eclectic at all times. You have to keep your minds open to knowledge. Not to Gnosis, but to Epi-Gnosis according to John 17:3. Gnosis is knowledge, but Epi-Gnosis is Correct Knowledge. You will stop suffering when you kill your egoistic impulses of desire. The solution is to integrate Buddha and Christ into one body of Epi-Gnosis. Don't be afraid. You will see the light when you become Universalists. Satori will be accomplish at any time. You will live in a perpetual Nirvana that will lead you to Mahanirvana. Don't be afraid to study the Bible. But don't distort God. God is unconditional love and omnipotence, so Universal Salvation makes sense. Don't follow the Calvinist ideas. Don't follow the Arminian ideas. The Calvinists state that God can give salvation to all the Humankind, but that God doesn't want to. So they rely on the wrong concept of Election. Arminians state the opposite. They assert that God wants to give salvation to all human beings, but that God can't due to the free will of them. That's a wrong concept of free will. There is no free will; there is only free agency. Universalists hold the correct vision of God. They teach that God wants to give salvation to all human beings, and that God can give salvation to all of Humankind. This is the correct worldview. My Four Noble Truths will guide you to knowing Christ in an intimate way. You won't be Christians; you will be Buddhic-Christics. That is the correct path. That is the true reconciliation between Man and God. Kill suffering at its root. Don't distort the true idea of a loving God. Before I didn't want to deal with the concept of God, because you were not ready. Now you are ready for the Fifth Noble Truth. Buddha and Christ work together for the salvation of all Humankind. That is the Fifth Nobel Truth. Be Buddhic; don't be Buddhists. Be Christic; don't be Christians. That is the right path for achieving Nirvana and Mahanirvana. Satori will come up at any magic instant. Firstly, you have to be aware of your sinful condition; secondly, you have to be awakened through satori; thirdly, you have to be illuminated through the light of integration between Buddha and Christ. This is the Fifth Noble T

Exam questions Essay Example | Topics and Well Written Essays - 500 words

Exam questions - Essay Example If the right is bought, it is called a long call; if the right is sold, it is called a short call. An option that gives the right in due course make a sale at a predetermined price is called a "put" option. If the right is bought, it is called a long put; if the right is sold, it is called a short put. i) Flexibility - Options are an extremely flexible tool. Options can be bought or sold in many different combinations for many different investment opportunities (i.e. Stocks, indices) . This allows for an investor to take advantage of varied market conditions available at a time. Options can be traded to address rising or declining markets, quiet markets or volatile markets with uncertain price directions. ii) Increased trading opportunities – There are a great number of strategies that can be adopted while trading options. These create additional profit and risk management opportunities for traders thus an increase in returns. iii) Limited risk with unlimited profits – If one buys a call option, they benefit from unlimited profit potential as the stock moves higher while the investor who buys a put option, has the benefit of unlimited profit potential as the stock moves lower. Index options are financial derivatives that give the possessor the right, but not the obligation, to buy or sell a basket of stocks, such as the Nasdaq – 100 index options, at an agreed-upon price and before a certain date. An index option is comparable to other options contracts, the difference being the underlying instruments are indexes. One may use index options to hedge when there is need to protect the value of the portfolio of mixed stocks in case of a market decline. Index puts are utilised in this instance. Index puts are generally used to protect unrealised profits stemming from an investor’s portfolio. There may be various classes of options that are available