• Ethics of Penn Square and Dow Corning
    Ethics of Penn Square and Dow Corning Ethics of Penn Square Bank and the Dow Corning Bankruptcy Penn Square Bank: What were the ethical pressures on the firm concerning documentation, credit extension, and revenue recognition that lead to the final collapse? What should have been done...
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  • Penn Square Bank & Down Corning Bankruptcy
    revenue recognition was overstated, and credit extension was unverified and inferior. Instead, Penn Square Bank should have considered the following measures: • An oversight or review board should be been established to oversee verification of credit or collateral valuation and determine the risk...
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  • Ethics of Penn Square Bank and the Dow Corning Bankruptcy
    forcing them to originate the loans and sell them to large banks. The arrangement alone was not the problem it was the loose credit terms and lack of documentation employed by Penn Square Bank. The loose credit terms and issues with valuation of the collateral led to the demise of not only Penn...
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  • Principles of Auditing
    committee (US Congress 1982) that several members of his firm were wellacquainted with Penn Square’s top executives. Peat Marwick disclosed that several Oklahoma City partners had previously obtained more than $2 million in loans and a $1 million line of credit from Penn Square. To resolve a possible...
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  • Enron Case Scandal
    executives and the board of directors grew arrogant, thinking they were invincible. This hard headed mentality formulated by these executives created a corporate cultural norm that drove the concept of profitability and success, no matter what the cost. These norms would also lead to the humiliation and...
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  • Solution Manual-Auditing and Assurance Services
    Professional Conduct. Violations of the Code are not acceptable. Hopefully, most practitioners strive to uphold the ethical principles specified in the Code of Professional Conduct. Relevant Facts a. Frank believes the revenue recognition method is inappropriate. b. The partner believes the...
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  • Auditing Quiz Bee
    client notes further, and you corroborate, that some other firms would account for the item in the manner suggested by management, although it is not clear that a majority of other firms would accept such accounting. Required a. What is the ethical dilemma? b. Does competition lead to a lower...
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  • Accounting Systems, Internal Controls, and Ethics
    until the bank runs out of money because non-performing loans do not provide the cash inflow which depositors’ interest and withdrawals require. By 1996 NBF’s bad and doubtful debts were estimated at over 8 percent of GDP. The collapse was due to the extension of loans without adequate collateral or...
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  • Investment Law
    within the loan documentation to attempt to exclude liability in this area. The lead bank will include provisions in the information memorandum and loan agreement confirming that the other banks have made their own credit assessment and that no representations or warranties are given in this regard...
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  • Lehman Brothers
    very large global financial services firm founded in 1850 in Montgomery, Alabama. They were the fourth largest investment bank in the United States. The firm also was in business for equity and fixed-income sales, and trading, research, investment management, private banking, and private equity. The...
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  • Testbook Answers
    the tradeoff between relevance and reliability can be equivalently framed in terms of revenue recognition as well as balance sheet valuation. In effect, balance sheet valuation is in terms of the debit side of asset valuation whereas criteria for revenue recognition are in terms of the credit...
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  • Enron and World Finance - a Case Study in Ethics
    , revelations concerning which were to lead to the break-up of the firm, led to the following assessment by the Powers Committee: ‘The evidence available to us suggests that Andersen did not fulfil its professional responsibilities in connection with its audits of Enron’s financial statements, or...
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  • Crisis
    during the stock market bust were successfully hedged, having earlier purchased credit default swaps on these firms. Regulators seemed to draw comfort from the fact that major banks had succeeded in transferring losses from those relationships to investors through these and other hedging transactions...
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  • Enron's Fall - 0412100
    investors in Enron’s off-balance-sheet partnerships, and that had credit exposure to Enron.18 Concerning this failure, the report draws attention not only to the links between analysts’ bonuses and the profitability of the firms employing them, but also to more general pressures for favourable...
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  • Enron Case
    Explanation of the fraud…………………………………………………………. 11 Damages incurred…………………………………………………………………12 Final outcome of the Case………………………………………………………. 13 How the fraud was discovered………………………………………………….. 13 (III) Enron’s Influences and Ethical Concerns…………………………….. 14 (IV) Enron’s poor decisions and the better...
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  • Enron
    the transactions. The role of the investment and commercial banks were also critical with Enron’s collapse for none of these firms alerted investors about derivatives problems at Enron which is part of their responsibility. To note, security analysts covering Enron still rated it a “strong buy” or...
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  • Audit Cases
    above John. Either way, Brent should do his best to get the work done within the budgeted hours, but should never unjustifiably cut corners. If he comes in over budget, he can stand with good conscience that he did what was right. Many firms reward people who stand up for ethical behavior and look...
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  • Acct 460 Final Study Notes
    , remittance advice, bank deposit list, cash receipts jornal, credit memo, sales return and allowance journal, uncollectable account authorization form, a/r master file, a/r trail balance, monthly statement Note 2: Functions in the Cycle Processing Customer Orders * Preparation of customer order: when...
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  • Possible Exam 3
    slows 11. What key event, which occurred in 2005, lead to the subprime lending fiasco? a. Credit default swaps allowed as insurance on subprime collateralized debt obligations b. U.S. housing prices fault c. Gramm-Leach-Bliley Act allows banks to speculate d. Loan standards discarded...
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  • Business Ethics Is a Priority
    employees at all levels of the organization. The corporate ethics movement speaks to the need to guide individual decision making in order to develop an ethical workplace environment. The Priorities of a Firm Corporations have a wide ranging set of responsibilities to owners, employees...
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