MANAGING THE HUMAN RESOURCE Case Study Example | Topics and Well Written Essays - 4000 words

MANAGING THE HUMAN RESOURCE - Case Study Example However, entrepreneurial skills vary according the core nature of individual entrepreneurs. For example, Nelson Mandela and Bill Gates have different entrepreneurial skills as former more focuses on social entrepreneurial skills and later have entrepreneurial skills in terms for business and innovation business perspective. Many scholars and critics have presented their views and understating in explaining rationale behind the entrepreneurial skills among the people and at the same time, they have also categorized them in their core orientations. John B. Miner has identified four types of entrepreneurs i.e. â€Å"The Personal Achiever†, â€Å"The Supersalesperson†, â€Å"The Real Managers† and â€Å"The Expert Idea Generator† (Miner, 1996, p.4). On the other hand there are other groups of scholars who have their own perspectives in this regard. As per them, some of other types of entrepreneurs are like social entrepreneurs, lifestyle entrepreneurs, wealth creation entrepreneurs etc. However, there are certain common traits which are present in all types of entrepreneurs and these traits are responsible for shaping their entrepreneurial skills. ... The project describes the management styles used by Murdoch in running his corporations. An analysis has also been provided with regard to the leadership styles followed by him to exercise control over his employees. Rupert Murdoch has been responsible for growing the giant mammoth of the media company, News Corporation from a very small; newspaper in Australia. It became one of the largest and the most influential media groups of the world. Murdoch has been able to gain immense power with the rapid expansion of the global media company. His company includes television, cable network programming, filmed entertainment, book publishing, direct broadcasting, magazines and even newspapers in Australia, United States, UK and Europe. Question 1 Entrepreneurial style of Murdoch and its impact on business Corporate entrepreneurship has lately evoked significant interest among the management practitioners and the academicians in the world. It is referred to as entrepreneurship in the establis hed organisations and firms. It includes the set of activities characterized by proactiveness, risk taking and innovation which manifests themselves as acquisitions and mergers, licensing, franchising, research and development, contacting and divestment among other. Explorations of the theme of entrepreneurships have relevance in this regard as it seeks to identify how organisations are able to attain sustainable growth through this entrepreneurship. Analysis of the above issues provides an advantage for the other organisations for charting out a path (Jauhari, 2004, p.1). The project aims to put forward the conceptual framework of entrepreneurship of

The Adventures of Sherlock Holmes Essay Example for Free

The Adventures of Sherlock Holmes Essay All typical detective stories have features in common. They all contain a detective, also the stories contain a crime and a criminal, also in typical detective stories the criminal usually has a motive. Another detail in a murder story is: the detective always begins an investigation and this leads to the discovery of the criminal.  The Adventures of Sherlock Holmes were set and written in Victorian England by Sir Arthur Conan Doyle. The Hound of the Baskervilles is about a big black vicious hound that is haunting the Baskerville Family and after the mysterious death of Sir Charles Baskerville; the legend of the hound was revived. A man goes to tell Holmes and Watson. Holmes and Watson take up the case. The Speckled Band is about a woman who tells Holmes that her sister has died. The woman thinks its her stepfather, Dr Roylott. She believes that he has killed her for her inheritance  The Man With The Twisted Lip is about a woman who sees her husband in a window of an opium den and goes in to see him but he isnt there. She asks Holmes to investigate.  Sherlock Holmes stories are unusual in that they are not written from the detectives point of view. It is written from Dr Watsons point of view. This means that the reader knows the events as they are happening and doesnt know what the detective is going to do next. This enhances the murder mystery quality because the reader wants to know what happens next and it builds suspense with the reader Typical Sherlock Holmes crime settings are normally dark, damp and gloomy places. These are normally places such as dark alleyways and streets. Also big stately homes made to look like eerie haunted places. Another setting is out on the moors in Hound of the Baskervilles, the moors are foggy and it is usually raining.  The Manor House settings used in the Hound of the Baskervilles and The Speckled Band contain large portraits on the walls of large old rooms. They also contain old wooden doors that creak as they open and the doors lead into large open passageways. A large wall surrounds the whole manor and at the entrance were two large iron gates. This enhances tension because it makes the reader feel the tension that the characters are feeling and it places a picture of the setting in their mind. The moors around the manor house in Hound of the Baskervilles are foggy and mysterious, they are barren and inhospitable. They seem abandoned and lonely. The moors contain dangerous quicksand. This creates tension, by the reader knowing, that something spooky or dangerous is about to happen. The opium den in The Man with the Twisted Lip is dark, dank and smoky. There are bodies spread all over the floor in different positions. The untypical story is the Hound of the Baskervilles because its set out of London, on a moor whereas all of his other stories are set in homes or London. The criminals in Sherlock Holmes are not typical because they have obscure ways of doing things. We know that Dr Roylott has a criminal nature because he is aggressive and shows his strength when he comes to see Holmes. This quote shows Dr Roylott when he bends the poker in Holmes apartment He bent it into a curve with his huge brown hands. This shows his strength and aggressive nature. Another quote that shows how everyone became scared of him, because when ever he went out he either got into brawls or quarrelled with the locals. He became the terror of the village  We doubt Hugh Boone as a criminal because he doesnt really commit a crime, he was a man in lots of debt so he ran away and disguised himself as a beggar and started life again. Which suggests he is a proud man but not a criminal

A Case Study of Change: Obesity

A Case Study of Change: Obesity Obesity in primary care has become an increasingly common problem. Like any other medical condition overweight and obese patients should have access to appropriate treatment and care using a delicate, understanding and non-judgemental approach. Weight loss in primary care is of interest for the purposes of improving a persons quality of life. During the study the author will explore the prevalence of obesity using the geographical trust region with a population of 158,000 (Office of National Statistics (ONS) 2007) in comparison with the town centre based practice where the author works as a trainee nurse practitioner. The practice has a mixed socioeconomic, predominately (95.53%) White British population of 15, 186 (Annual Public Health Report 2008). Local authority with in which the author works has been ranked as 49th most deprived out of the 354 local authorities in England in 2007 in the Index of Multiple Deprivation 2007 (IMD 2007). Although obesity is increasing at the same rat e in all social classes, the prevalence of obesity is higher in lower socio-economic groups, particularly in women (Henderson and Gregory 2002). The National Institute for Health and Clinical Excellence (NICE) developed guidelines on identifying and treating obesity in 2006 following on from the Scottish Intercollegiate Guidelines Network (SIGN 1996), this in turn along with Primary care service Framework 2007 has lead to Health Care Professionals looking at ways to gain the background knowledge, provide and implement a service to deliver integrated obesity management enabling patients to change their eating and activity habits and motivate obese individuals to lose weight, maintain weight lose and increase fitness in accordance with the White paper (2004). It is also thought that additional training in behavioural counselling maybe vital when assessing a patients readiness to accept change (Drummond 2000). Individuals who are not emotionally ready to tackle the issue of lifestyle changes are more likely to fail. Dealing with obesity in the practice setting can be achieved by setting up specific lifestyle clinics dedicated to offering support and advice to patients who wish to lose weight or maintain a healthier lifestyle looking specifically at behaviour change. This clinic can run alongside or in conjunction with existing chronic disease and routine Health check clinics with self referral or healthcare professional referal. By helping the patient look at how unhealthy behaviours can be an element of their lifestyle and daily choices (see table 1) it is possible to suggest ways in which to change in a mutually agreed plan of care. Awareness and knowledge of what change is required and why, are fundamental first steps in enabling change to occur. Motivation is an essential part of nearly everything we do. Regular reviews can provide motivation and change behaviour through incentives and penalties. Personal factors, such as individuals self motivation, drive and desire to improve their appearance and health are also important. Target and objectives can influence how much people want to change but their priorities and commitments may also obstruct their ability to change. Change to clinical practice can only be successful if the reasons for introducing the change are clear, compatible with current practice and ideas and the process is planned carefully in advance (Davis1999). Change theories share common factors. To ascertain behavioural change, according to these theories, patients need the desire to make a change, have the ability to make the change, believe that they will have a better quality of life if they make the change, believe that the change is right for them, and discover how and when to make changes. Obesity management needs an integrated approach involving a multi-disciplinary team of Healthcare Professionals. General Practice is an ideal starting point to influence and initiate management strategies. Healthcare professionals need better training and access to management programmes that include dietary advice, physical activity and behavioural change if they are to initiate the policy effectively. For the programme to succeed the patient needs to be the central component. Obesity does not lend itself to the classical medical model where the condition is diagnosed, treatment prescribed and then the professional responsible for the outcome. It is ultimately the patient who is in control over their decision to proceed and succeed. Weight lose/maintenance is not easy for obese/overweight patients, many of whom have already tried and failed in controlling their weight. It is the role of the primary care team to support and encourage weight management and lifestyle change. In an attem pt to achieve these changes in behaviour management are vital. Eating and physical activity are human behaviours which can be modified even though they are predisposed by a complicated set of factors. If in practice the overweight/obese patient was identified and advised of the fact, they simply wouldnt care. Consultation with the patient and establishing if they recognise they have a weight problem using a sensitive and respectful manner is the first essential step to change. It is then possible to produce a plan of action involving providing information and eliciting the patients views about their weight as well as details about their weight history and any previous attempts at weight loss. The early stages of consultation are about building a rapport with the patient through active listening. Communications skills are essential to implement a behavioural approach effectively (NICE 2007). Professionals should also have the ability to express consideration, build self-belief and provide clear, structured and relevant information. Raising the issue of lifestyle changes can be extremely difficult to talk about as the patient may feel uncomfortable and they may feel responsible. This could have a negative effect on the patient-professional relationship (Drummond 2000). As a professional it can be maintained that we have a duty of care to discuss the importance of a behavioural approach in managing obesity and its practical application in helping overweight patients achieve and maintain behavioural changes. Pearson 2003 suggests that ‘linking weight to a current health concern is often an appropriate way to introduce weight management issues. Advice should be individualised to condition and patient. By providing the patient with the appropriate information to help them make informed decisions about their health behaviour is part of the professional role. By individualising programmes to assist/support patients in changing their lifestyle for good can give them the incentive to lose some weight or prevent further weight gain. There is always the risk at this point that the patient will abandon the change process altogether. Behaviour change theory examines the difference between models of behaviour and theories of change (Darnton 2008). Models of behaviour identify us with specific behaviours, by pointing out the underlying factors which influence them. By contrast, theories of change illustrate behaviour change over time. The theories are complementary to each other; understanding both is essential in order to improve successful advances in behaviour change. Numerous models can be incorporated together to assist in understanding the reasons for our behaviour and how they interrelate but also help us work out the relationships between the reasons to allow us to envisage the behavioural outcomes. Tim Jackson writes ‘models reveal factors where policy can work (Jackson 2005). Models essentially recommend a feature menu for policy makers to choose from making no one model the perfect model but giving the policy maker choice and flexibility to use several different models. Social-psychologist Kurt Lewins Change Theory (1951) involves group work to change habitual behaviours, using an unfreezing, restructure, refreezing guide in which habitual behaviours (attitudes, values and behaviours) are studied by the group and reorganised, before being reintegrated back into everyday routines (Coghlan and Brannick, 2003; Coghlan and Claus, 2005; Lewin, 1951). Lewins work on change has provided the basis for many later advances in change theories (Lewin 1951). Lewins change theory will be the basic model for the proposed change in practice. Lewins early research entailed changing the patterns of diet in America and is therefore particularly relevant to issues, such as obesity, that we face today. Lewin concluded ‘that we are likely to modify our own behaviour when we participate in problem analysis and solution and more likely to carry out decisions we helped to make (Lewin 1951). Unfreezing is a reflective process that involves unlearning without removing own uniqueness and difficult relearning and restructuring of thoughts, awareness, beliefs and way of thinking. In the planning process of change this critical starting point for change can be overlooked. Three pre-conditions simultaneously need to be satisfied for current patterns of behaviour to unfreeze. Firstly ‘disconfirming information which involves disproving a theory. Secondly Lewin (1951) suggested creating ‘guilt or survival anxiety, getting patients to accept behaviour is incorrect but this destructs self-esteem and identity. The third pre-condition was that disconfirming information could also create what he termed ‘learning anxiety. This creates a sense of weakness, a feeling that change cant be initiated due to being unable to learn quickly enough to enable a move into a new situation and adapting inadequately often looks more acceptable than risking failure in the learning pr ocess. Overcoming learning anxiety is probably the hardest and most critical element in unfreezing. Unfreezing is the most significant and complicated part of any change process, and also the most difficult to achieve as self-esteem and identity securely control people. Yet achieving this is not the end but a gateway to the next level Lewins (1951) next stage, ‘restructuring, also had three elements beginning with reorganising thinking. He called this ‘cognitive redefinition and it is at the heart of much of todays ‘systemic thinking (Senge 1990). Albert Einstein quoted ‘the significant problems we have cannot be solved at the same level of thinking with which we created them. It is therefore essential to meet and communicate with others to look at the same problem in different ways. Lewin (1951) then suggested ‘managed learning. ‘Imitation or identification is the simplest way of learning in this situation. Learning by copying those we respect and trust. This process is very evident today in standard setting and peer-based learning. Lewin (1951) suggested learning in this way to be shallow and superficial; seen as an easy alternative in a difficult situation as it is a case of doing what has been advised without really understanding the implications of why it is being done. Kurt Lewin (1951) therefore favoured a different means of learning that he called ‘scanning. This meant seeking alternative sources of information including reading, travel and conversation with people from different backgrounds in order to obtain an accurate understanding of your own situation and adapt accordingly. The problem he saw with peer approaches was that if nobody had research a subject in detail data was incomplete. And if the new behaviour isnt correct for the behaviour and understanding of the learner then it becomes ‘disconfirming. The final element of Lewins model (1951) is ‘refreezing: making things stick. What he found was that working with ‘gatekeepers, collectively, through ‘scanning rather than ‘identification creates change that sticks and becomes eventually refrozen into the new norm. Lewin offers a basis for change within an ever changing environment. Health Belief Model Janz and Becker 1984 was influenced by Kurt Lewins theories (1951) which state that perceptions of reality, rather than objective reality, influence behaviour. For an obese patient to perceive the effects their weight has on their lifestyle they need to be able to admit they have a weight problem. The stages of change model Prochaska and Diclemente 1984 describes change as a process, broken down into a series of stages through which individuals progress, dependent on the degree of interest in the desired outcome of the individual. The concept of change is that the patient considers the consequences of actions for changing behaviour, what their desired outcome is and which results in a contract to make change. Changing habits happens gradually and often people will need to go through stages of the cycle many times before they achieve lasting change. Gottlieb 2004 suggested that the stages of change model conceived that everyone is on a journey of change, beginning with limited knowledge and progressing through numerous stages to achieve change. ‘Societal models are also important to those developing policies and change as often it is necessary to work on the background factors limiting behavioural options directly. Enabling change is not just about changing a persons perception of these material factors (e.g. cost). The Main Determinants of Health model (Dahlgren and Whitehead 1991) needs to be incorporated into obesity management and is a good ‘Societal model. The model shows the individuals behaviour as one element, beneath four other ‘tiers of influencing factors including social and economic factors, cultural factors, environmental factors and also the services that are available locally. Since Lewins field theory (1951), theoretical approaches to change have recommended developing theory through practice. Piloting and evaluation, followed by figuring learning back in, are the final stages in a process of intervention development which can be characterised as learning through doing. Guidance on policy development needs to be clear; however, it must also be flexible to different frameworks. Evaluation of any policy is undoubtedly important. Obesity as we have seen is measured in many different ways. Evaluations should measure change in the intended behaviour among the consultation group, as well as the effect on the key influencing factors. Process evaluation concentrates on how a program is put into practice rather than the outcome. It asks how services are delivered, differences between the intended population and the population served, how programmes are accessed and managed. It aims to provide an explanation of how or why proposed outcomes of the project were (or were not) met. Information from process evaluations can be used to decide future action, looking at whether a program should be abandon and a new plan of action devised , revise the current program (or components of it) to improve delivery, or how best to deliver it. This type of evaluation may also provide understanding about a programmes cultural, socio-political, legal and economic contexts that affect i mplementation Impact evaluation measures overall achievements; it is interested with the direct result of a program when it is finished. It should include a way of measuring unintended effects of a program, as well as the individuals targeted by the programme. Outcome Evaluation measures program goals and is concerned with longer term benefits of the program among the targeted population, and by how much. Monitoring of outcome is useful and necessary to determine whether outcomes were achieved within a specified timescale (Health Promotion, 2002), whereas evaluation attributes the changes observed to the intervention tested The models and theories used to underpin the intervention may then be reassessed in the framework of the target behaviour, and understanding of the behaviour itself assist in progression to the closing phase of the cycle in which learning from the evaluation is fed back into the policy process. As part of the evaluation process, the appropriateness of the behavioural models used in the intervention should be assessed. Evaluation findings should update the development of the intervention itself and future interventions in similar policy areas. Audit is a technique that can be used to monitor then maintain or improve the quality of care and services provided. It is the method used ‘to assess, evaluate and improve the care of patients in a systematic way, to enhance their health and quality of life (Irvine 1991) Structural audits are undertaken in relation to what resources there are available, suitability and access to the clinics, access to continued support either 1:1, self-help, buddying up with others, web based support or group and also the staff available to run the clinic looking at skill mix. Process audits focus on what was done to a patient, where clinical protocols and guidelines followed and did they work in practice. The audit may look at how an individual or the team operate, looking at waiting times from referral, patient recall for review, management plans, record keeping, communication between the patient and staff. Outcome audits relate to the impact of the team or services provided on the patient. This could be achieved through patient satisfaction questionnaires provided at the start of the intervention, part way through and on reaching target. Has there been an impact on their lifestyle and if so was this a positive experience or has it had a negative effect on their lives. Clinical audit gives valuable insight into how effective a service is being provided by systematically collecting and analysing data on current practice. This allows the lifestyle team to become involved in assessing the effectiveness of their interventions. Clinical audit can help identify areas of behaviour and management which meet required standards, identify area which could be improved, promote changes in problem areas, improve quality of patient care, develop Healthcare Professional skills, give direction for the most effective use of resources and evaluating how successfully changes have been implemented. Audit is also an important part of clinical governance, there to encourage the continual monitoring and improvement of healthcare services. When designing an audit many factors need to be considered (see table 2) A fixed date of 6 months would be agreed from the start for the collection of data and interpretation of the results initially but then audit would continue as long as needed to provide information to continue improving the service. Cost effectiveness also needs to be evaluated. Cost-effective analysis compares the cost-benefit ratio for one intervention against an alternative intervention. Benefits maybe expressed as patient-orientated health outcomes such as quality of life. The economic impact of lifestyle change maybe assessed in terms of direct costs, indirect costs and intangible costs. Direct costs arise from the use of health care resources and if the direct cost of providing treatment is lower than the direct cost of illness, the treatment is cost-saving for the health care system. Indirect costs look at the cost of illness to the economy. The broader costs to society and the economy from weight problems already cost the wider economy in the region of  £16 billion, and is set to rise to  £50 billion per year by 2050 if left unchecked (Department of Health 2009). Intangible costs are monetary values attached to the physical or psychological effects of illness, such as joint and back pain, breathlessness, varicose veins and gallbladder problems. Obesity is estimated to cost the National Health Service approximately  £4.2 billion (Department of Health 2009). Simple activities like getting around can be problematic for an obese individual (Drummond 2000). Quality of life for an obese person is thought to be less than optimal and this can lead to psychological problems. Intangible costs of illness maybe compared with the intangible costs of treatment, such as surgery.

Nazi Olympics :: essays research papers

The Nazi Olympics   Ã‚  Ã‚  Ã‚  Ã‚  Theme:  Ã‚  Ã‚  Ã‚  Ã‚  Many events of The Nazi Olympics surround this sporting festival to make it one of the controversial events in sport history. Not only does Mandell cover the 1936 Olympic Games themselves but he gives insight to the history of the modern games, participation by the United States, the role of the games in the Nazi propaganda efforts and portrays heroes and key figures. Mandell wrote about the intersection of sport and politics and how world leaders set the agenda, not the athletes. The Nazi’s used the 1936 Olympic Games as a way to reinforce their political and racial goals. Although they were founded as part of a vision of world peace, the 1936 games became a stage for political disputes.  Ã‚  Ã‚  Ã‚  Ã‚  The Nazi Olympics takes an in depth look at the efforts the Germans made to show the rest of the world that they had again become a powerful nation under the leader of Adolf Hitler. The events that followed the games in Germany, mainly the Holocaust and World War II overshadowed the Berlin games. However, it is very important to note that a world gathering like the Olympics took place in a country that was in the process of eliminating an entire race of people. The games were a huge success in regards to the Nazi regime, they were able to fool the world and prove to Germany that they were a peaceful and stable nation.   Ã‚  Ã‚  Ã‚  Ã‚  Capsule:  Ã‚  Ã‚  Ã‚  Ã‚  In 1931, the International Olympic Committee awarded the 1936 Summer Olympics to Berlin. The choice signaled Germany’s return to the world community after its isolation in the aftermath of defeat in World War I. Two years later, Adolf Hitler became chancellor of Germany and quickly turned the nation’s fragile democracy into a one-party dictatorship that persecuted Jews, Gypsies, and all political opponents. The Nazis’ claimed to control all aspects of German life which also extended to sports. In August 1936, the Nazi regime tried to camouflage its violent racist policies while the country hosted the Summer Olympics. Most anti-Jewish signs were temporarily removed and newspapers toned down their harsh rhetoric. Movements towards the boycott of the Nazi Olympics surfaced in the United States, Great Britain, France, Sweden, Czechoslovakia, and the Netherlands. Debate over participation in the 1936 Olympics was more in tense throughout the United States, which traditionally sent one of the largest teams to the Games.   Ã‚  Ã‚  Ã‚  Ã‚  Responding to the persecution of Jewish athletes in 1933, Avery Brundage, president of the American Olympic Committee initially considered moving the Games from Germany but he was blind and was determined to accept the invitation to Berlin.

Beowulf The Epic Hero :: essays research papers

Beowulf the Epic Hero What does it mean to be a hero? Like anything else in this world, the definition of the word hero can be argued. Some may say that a hero can be passive, that is if he or she refrains from doing a certain action it makes them heroic. Others would argue that to be truly heroic the character must never turn tail and always face the obstacle head on even though he or she may die in the process. So is Beowulf a hero? Yes, Beowulf is a great epic hero, but his greatness comes only from his sword and not from his mind. In order to be a hero in an epic poem there were certain qualities you had to possess. First of all you had to be a male. It is rare to see any woman in epic poems taking on the role as hero. Women were usually only minor characters who are often not even named. Second of all you had to be a man of noble birth. Meaning that the hero had to be either a king, prince, knight or some other high-ranking person in society. Beowulf satisfies all of these requirements. He is the nephew of the king of the Geats, and son of a great warrior. As was common in literature up until recently, Beowulf’s mother was not named as well as Grendel’s mother. The slave character was not named too, which in my mind would indicate that women had little more status than slaves or property during the times of the Vikings. Fittingly enough, Beowulf’s sword even got a name, for it is by his sword that he earns his eternal fame and glory. However, besides the fact that Beowulf was of noble lineage and that he was a great warrior, he has some other noble qualities. On the plus side for Beowulf we can say that he was a pious warrior. Although he was from being a modest warrior, for he was anything but modest when it came to his great deeds of valor on the battlefield, he did credit Jesus for every success he has come across. This is not really a revolutionary idea for epic heroes, as we see the heroes of the Iliad, Odyssey, and the Aenied constantly praying to the gods for glory on the battlefield. The main difference is that they are pagans, and Beowulf is a Christian, which does not even really make sense because he was a Viking warrior and the Vikings were not Christians.

The Electoral College Versus a Direct Election System Essay -- Politic

The Electoral College Versus a Direct Election System â€Å"The Electors shall meet in their respective states, and vote by ballot for President and Vice-President†¦they shall name in their ballots the person voted for as President and in distinct ballots the person voted for as Vice-President† (Findlaw.com). The Twelfth Amendment set forth the rules and regulations for which the Office of President shall be determined. The founding fathers, in the second constitutional convention, laid the grounds on which setup what would be the Electoral College. Adoption of the Electoral College plan came late in the Convention, which had previously adopted on four occasions provisions for election of the executive by the Congress and had twice defeated proposals for election by the people directly. So why not conduct a direct election, by the people? After all, the President was to serve the people. There were four main reasons why the delegates of the Second Constitutional Convention wanted an electoral system. For one, a census as a prelude to the first election could not be taken. The first election served more as an appointment. There was not time for delegates to go back home, while under this newly formed Constitution, and search for delegates. Who would serve to defend the Constitution while this happened? The delegates knew this before hand. The states had a wide variety of suffrage requirements. If electors were to be chosen on the basis of population, should slaves count as a property, or under population? Even though they held large populations, the larger states rejected the idea of a popular vote. Virginia, one of the largest states of the time, had a population of 748,000. Of those, 306,000 were slaves, whic... ...cedure, until a 3/5ths of the states decide against it. Even the Founders themselves once supported a direct election process, but as they researched the outcome of such a system, the repercussions and consequences outweighed the chance to be a true democracy. Even so in 2000, the Electoral College has seen action for 200 years, and it will continue standing in lieu of public scrutiny, and even dimpled chads. Works Cited Census.gov. Visited Dec 5. http://www.census.gov/. Ferrand, Max, ed., Records of the Federal Convention. New Haven, 1911. 2:584 Findlaw.com. Visited Dec 6. http://www.findlaw.com/ James Madison to Henry Lee. 14 Jan. 1825, Records, ed. by Max Ferrand, 3:464. Kuroda, Tadahisa. The Origins of the Twelfth Amendment. Greenwood. 1994. Wood, Gordon. Creation of the American Republic 1776-1787. Chapel Hill 1969.

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.