Abstract This paper explains that the American International Group--AIG, the world's largest insurer--was reported to have arranged deals to manipulate financial figure in its own records and those of General Re, a reinsurance company, resulting in financial fraud during the autumn of 2000. The author points out that AIG also was involved in another accounting fraud with Brightpoint Inc., which was reported by the Securities and Exchange Commission in 2003; AIG worked closely with the Brightpoint people to tailor an alleged insurance policy that let Brightpoint overstate its earnings by an amazing 61% in a cash circulation deal from Brightpoint to AIG and again back to Brightpoint. The paper defines receivables are monies due from the customers, which are tallied by invoices and happen due to operating cycle's process of selling inventory or services on terms that permit delivery before cash is collected.
Table of Contents
The General Re Fraud
The Brightpoint Fraud
Cash & Accrual Basis of Accounting
Receivables and Inventory
Fixed and Intangible Assets
Liability & Stockholders Equity
From the Paper "Under the cash method of accounting, the books are maintained on the actual cash flow. Income is recorded on its receipt and expenses enter the books on their actual payment. Whereas majority of the businesses use the accrual basis, the most correct method for the company depends on the sales volume, credit policy of the company and business structure. In case of the accrual method, income & expenses are recorded while they occur, notwithstanding whether there has been exchange of cash and an example of this is sale on credit. Accrual method is appropriate when the annual sales are more than $5 million and the business is a corporate organization. Besides, it is suggested that while selling on credit, matching of income and expenses during a given period must be done."
Abstract This document discusses the need for the AIG WarrantyGuard Company to implement a relational database solution in order to reduce human error and increase efficiencies. This solution will also simultaneously impact revenues in a positive manner because invoicing and billing processes will be maximized. Additionally, the paper discusses how customer service quality will also be positively impacted through the facilitation of e-billing strategies enabled through the implementation of a relational database application.
From the Paper "AIG WarrantyGuard, Inc. (AIGWG) is a watch warranty company that accepts, completes and submits watch warranty invoices for warranty work done on behalf of OEMs for their customers. These warranty forms are complicated, time-consuming to complete and often rejected on the basis of simple clerical errors. The entire invoicing and billing procedure consumes substantial resources in terms of human capital spent completing and processing them, submission, and re-processing them if they have been rejected. Additionally, operating revenue is frozen while these invoices for billing are in the approval and payment process which, due to these invoicing clerical type errors, freezes a substantial amount of revenue from application elsewhere."
Abstract The paper analyzes the Federal Reserve Bank's response to the AIG, Lehman Brothers and Merrill Lynch crisis in terms of its implications on financial institutions, interest rates, inflation and the value of the US dollar. The paper discusses how the interconnectedness of these financial institutions made effective measures necessary, but shows how there is no guarantee that these injections into the world economy will boost investor confidence.
Outline:
The Federal Reserve Banks Response to Financial Institution Crises
Analysis of The Fed's Response
Implication on Financial Institutions
The Fed's Response and its Implications for Interest Rates
The Fed's Response and Inflation
The Fed's Response and Its Implications on USD
Conclusion
From the Paper "In light of the AIG, Lehman Brothers and Merrill Lynch crisis, the Federal Reserve Bank as well as other large central banks namely the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank have decided to inject USD180 billion in the world economy in an effort to avert further bank failures. It is quite disturbing that in the past few days, three of the financial industry's largest firms collapsed as a result of the rippling effects of the sub-prime mortgage crisis. It is good, however, that the Fed saw fit to act swiftly to remedy this problem but, the question here arises: Will the Fed's response be effective in remedying the crises at hand. Also, what are the effects of an injection of this magnitude into the world economy? "
