Read both of the responses and write a 100 word response for each one. Use 1-2 references as needed.
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It astonished me to discover all of the many frauds that took place in America’s history alone, involving corporate managers. Before some of my accounting courses, I mainly viewed fraud existing primarily with the general employee or the customers of a business. However, I have learned that the most impactful and detrimental fraud to a company takes place with corporate managers committing financial statement fraud.
Why would the people that earn pretty good salaries desire more and more? There have been cases where fraud committed through financial statements stemmed from greed. Meaning that some managers were simply not content with their salaries or either they accumulated so many debts through lavish lifestyles.
However, beginning with my Forensic Accounting course, I have learned that some common reasons or rationalizations given for committing fraud include: 1. Financial reports are manipulated to secure the stock value in the market. If a company’s report reflects high profits, the stock price is influenced to either retain its value or to increase in value. 2. Managers try to prevent employee layoffs. Layoffs are widespread in all jobs, however, when a corporation loses money; many employees can lose their jobs. For instance, Nissan in Canton, MS will reduce some of their production in vans and trucks, such as decreasing the production of Nissan Titans for example. Because of this decrease in production, 700 contract workers will be laid off in March of this year (2019). 3. Managers want to protect their incentives. Many companies support rewarding their employees by measuring the sales or profits.
Ward, S. (2019, January 17). Update: Nissan Expected to Cut up to 700 Contract Workers at
Canton Plant and is Offering Buyouts Retrieved from https://www.clarionledger.com/
I believe the three are significant, but I will emphasize that the factor that was most significant was the loss of professionalism. I will base my opinion on this paragraph of the article:
“Firms should reexamine their policies on hiring no accounting majors and experienced personnel. The restrictions imposed by Sarbanes-Oxley on the range of consulting services that auditing firms can provide will reduce the need for employment of such individuals. Even so, firms need to evaluate the costs of educating these people about the significance of accounting professionals and the importance of ethical behavior. Firm-wide training on ethics should focus on the underlying concepts and the overall philosophy and expectations rather than on the commonly emphasized “thou shalt not.” (CPA Journal, n.d.)
I believe professionalism has been a problem for a long time in the business, that so important behavior that the companies need to have and it is declining more often in our daily basis. There is a lack of integrity, honestly and more. I believe something that has to be taught as the article mentions is give the students an appreciation to be continuously professionals, not only in accounting, in every career because that is an important fact to get better results in personal life and business.
As the Bible says:
“Do your best to present yourself to God as one approved, a worker who does not need to be ashamed and who correctly handles the word of truth.” 2 Timothy 2:15 New International Version (NIV)
CPA Journal. (n.d.). Retrieved from http://archives.cpajournal.com/2004/304/infocus/p2…: http://archives.cpajournal.com/2004/304/infocus/p2…
The Holy Bible. (n.d.). New International Version.