Abstract This paper examines Enron's bankruptcy and takes a look at the business community and the people involved with the financial departments of the corporation in order to analyze reasons for the failure. It discusses those affected by the bankruptcy, including Enron employees, the public, and the external market.
From the Paper "The former employees of Enron are also the targeted audience as they are the ones who really suffered and they need to know and be assured that the prospect of their newly found joblessness is being looked into and hope shone through a weave of bureaucracy and red tape. Hundreds of current and former employees of the failed energy firm filed a joint court case, seeking damages for losses they suffered by investing in the company's share plan. The complaint, which is on behalf of more than 400 staff, names ex-chief executives Kenneth Lay and Jeffrey Skilling, ex-finance director Andrew Fastow, auditors Andersen and trustee firm Northern Trust as defendants. The allegation is that Enron encouraged its employees to invest their savings in its shares, despite the knowledge of senior executives about the firm's real plight."
From the Paper "All organizations are constrained by a scarcity of resources. Government and private industry alike must determine in which activities to participate, and how much money should be allocated to those activities. In order to make these determinations, the annual budget is developed. Developed for individual departments, divisions, subsidiaries and the company as a whole, budgets enable organizations to allocate resources across alternative uses. Analyzing where budgets fail provide managers with tools to hone the planning process. Properly implemented, budgets become a key part of the planning process. This research focuses on what budgets are, how they are developed, the advantages to using a budget, and how budgets fit into an organization's overall plan.
A simple budget lists various activities and the dollar ... "
From the Paper "This research compares the application of managerial accounting principles in government and private sector organizations. The movement toward making government more accountable includes pressures on public sector agencies to improve the efficiency of their application of public funds.. Measuring financial performance in government means applying managerial accounting principles to the operations of public sector organizations.. Managerial accounting principles were designed, however, with profit-oriented organizations in mind. This orientation of management accounting does not mean that the principles of the discipline are not applicable to government organizations, but it likely does mean that managerial accounting will remain more significant in the private sector than in the public sector."
From the Paper "This research examines Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 16, Prior Period Adjustments. Of particular interest in this examination are the reasons prompting the development of Statement No. 16, the provisions of Statement No. 16, and the key issues addressed by the FASB in the development of Statement No. 16, including a consideration of arguments pro and con on the issues addressed.
In the mid-1970s, the American Institute of Certified Public Accountants (AICPA) Committee on SEC Regulations requested that the FASB consider the criteria for prior period adjustments, as those criteria were stated in APB Opinion No. 9, Reporting the Results of Operations, and provide further guidelines for the application of such criteria.1 APB Opinion No. 9 stated, among other things, that prior period adjustments were limited to the..."
Abstract This paper defines and compares two concepts in accounting - the cash basis and the accrual basis. It shows that the cash basis of accounting is more likely to be used by service businesses than by retail or manufacturing businesses. The paper also provides an example in table form to show the differences between the two systems.
From the Paper "In short, under the cash method, a business reports income when it is received and reports expenses when cash is disbursed. Under the accrual method, a business reports income when the business has the right to receive the income and reports expenses when all events, which create the liability, have occurred and the amount of the expense is reasonably determinable."
Abstract Perhaps one of the most prominent discussions involving accounting has to do with the differences between financial and management accounts. Some regard these differences to be a question of legality. Companies are required by law to submit financial statements based on certain requirements. On the other hand, management accounting can be structured to suit the needs of the company. However, the fact that firms can structure their management accounting statements according to their needs might lead one to suggest that major differences between these two systems relate to practicality. With this in mind, it is hypothesised that while legal issues are important for determining the differences between financial and management accounting they are not the only considerations, one must also consider the extent to which practical considerations contribute to the development of these differences.
Abstract Defines zero-based budgeting (ZBB) and explains how it works. Provides a history of ZBB. Discusses the role of Jimmy Carter as Governor of Georgia and President of the United States. Examines the implications of the ZBB concept and the justification of all costs.
From the Paper "This research examines the zero-based budgeting process. The dual purpose of the paper is to (1) define zero-based budgeting and (2) explain how the process works in practice."
Abstract This paper provides background information about Steinway and Sons. It then explains what activity-based costing is and whether this would be a good method for the company. The writer looks at the advantages and disadvantages of the method and discusses how an accounting method can effect a company's success..
From the Paper "Looking at the business of Steinway & Sons, I have been tasked to make a decision as to whether or not they would be a good candidate for Activity Base Costing. To this, I say there are some positives and negatives to using Activity Based Costing. We will discuss how Activity Based Costing would affect Steinway & Sons if they were to adopt this method of accounting."
Abstract The paper summarises California's accounting code of ethics which has been formulated for accounting professionals to ensure the practice of the profession with integrity and objectivity, honesty, and according to the best accounting practices. The code allows accounting professionals
to be ethical with their clients as well as the accounting system. The paper further explains the requirements of the California Board of Accountancy. The paper discusses accountant-client privilege as well as accountant work product, i.e. the work an accountant performs for a client is the accountant's work product. The paper concludes with the code violations liable to criminal and/or civil action.
From the Paper "Ethics has always been an important part of business transactions. Freedoms of information, stricter government regulations and electronic media have made ethics even more essential to business practices. California's code of business ethics expects the accountants and accounting related professionals to be ethical with their clients as well as the accounting system.
"In order to perform their work independently and deal with client-accountant relationship Californian system protects accountant-client privilege similar to that of a lawyer-client relationship with a few exceptions.
The accountants have to carryout their work in a professional manner. Code violations such as fraud, misrepresentation, and negligence could make the client liable to civil or criminal liabilities."
Abstract The following paper consists of an analysis performed on an example cash flow sheet. A summary of work performed and conclusions that can be drawn from this analysis are included. A fictitious company, Rainbow Paint Company, is used as a case in point with regards to cash flow and operations and profits in the future.
From the Paper "The statement of cash flows is a tool used to assess the capacity of a firm to achieve goals such as generate cash flow from operations, maintain and expand operating capacity, pay dividends to shareholders, pay debts including interest when due, generate future profits. The cash flow statement examines the flow of cash rather than net income.
The cash flow statement is divided into three sections Operating Activities, Investing Activities, and Financing Activities. Each section examines items, which increase cash and things that decrease cash".
Tags: shareholder, ration, sales, assets, shares, company, profit, income
Abstract An examination of the financial side of running a business. Includes graphs and tables. Topics discussed are short run costs, long run costs, monopoly and oligopoly.
From the Paper "In economics, the short run is defined as a time period in which a company's inputs are fixed. The short run costs of a firm are the cost functions that are prevailing in the production of a firm's goods in the short run. In the short run, the obligations of the firm per time period for all fixed inputs are called "total fixed costs". These includes the interest payments on the capital borrowed for the purpose of business, property taxes, leasing expenses etc. on the other hand, the total obligations for variable inputs over a period of time are the "total variable costs" of the firm. The variable inputs include those inputs that can be very easily changed and on a short notice. The variable costs of a firm usually includes the payments for the purchase of raw materials, labor costs etc. within a certain limit a firm can easily increase or decrease its output by varying the consumption of variable input. This gives rise to the Total Fixed Cost (TFC), Total Variable Cost (TVC) and Total Cost (TC) functions of the firm."
Abstract The paper defines inventory as all goods and materials used in production and distribution including raw materials, component parts, sub-assemblies, finished goods, and the various products and supplies required in the production and distribution process. The author of the paper shows that Inventory can be a liability as well as an asset: excessive, finished (goods) inventory requires larger warehouses and that many times this is the first indication of bad decisions in the production and process stages. The paper shows that improving product-availability and reducing overall working capital investments, without jeopardizing the company performance is a tightrope that most inventory managers have to walk. The paper uses Toyota car manufacturers as an example of successful inventory management.
From the Paper "Inventory personnel have to constantly track market conditions and price trends. Software has to be designed to input these trends to determine the inventory requirements and the Economic Order Quantity (EOQ) (Business Open Learning Archive, online). The inventory manager has also to be in constant contact with the production and the sales department, in order to ensure that stock outs at the sales end do not occur as a result of material shortage at the production end. Computerized systems have helped simplify the purchasing system and have help improve the efficiency of data recording."
Tags: manager, supplier, kanban, system, Just, in, time, (JIT), system, Optimum, Product, Timetables, (OPT), software, Toyota, business, management
Abstract This paper analyzes the accounting firm, Arthur Andersen and describes the role Andersen played in the Enron collapse. The paper uses this case to illustrate the debate of whether or not auditing should be separated from consulting. The writer states that the Andersen debacle has been instrumental in informing the public of the flaws of businesses in a capital market.
From the Paper "In recent months the standards of the accounting profession have been the subject of great scrutiny. At the forefront of this ongoing debate is the accounting firm of Arthur Andersen. The firm has been found guilty of obstruction of justice in the Enron case on the grounds that the company shredded valuable documents relating to the financial collapse of Enron. The purpose of this paper is to explore whether or not auditing should be separated from consulting."
From the Paper "Introduction
Companies which are busy making sales often assume that they are also making a profit. Yet this is not always the case, particularly with new businesses whose owners are technically competent and perhaps even excellent sales people but who are not familiar with the basic accounting methods used to determine whether a profit is being generated by the organization. If a company's cost structure is too high, the organization will be unlikely to generate a profit because any increase in volume also generates a high increase in costs.
Understanding the relationship among costs, volume and profit is critical if a company is going to be able to generate strategies which can promote long-term growth. This research examines the cost-volume-profit analysis technique and considers how costs are allocated to the three.."
Abstract The paper shows that, in recent months, the rules regarding special purpose entitles have come under great scrutiny. Special purpose entities allow firms to raise debt while at the same time making it almost impossible for investors to determine the actual amount of debt exposure. The paper shows that this was the case with Enron, which collapsed in 2001 when their fraudulent accounting practice were exposed. This paper investigates which accounting practices were violated as it relates to the SEC rules on Special Purpose Entities and full disclosure. It also discusses the ethical issues that the company made regarding the firms? accounting practices.
From the Paper "Not only did Enron behave unethically but the entire market failed to inform consumers. This market failure was made by the very institutions that were designed to protect investors. In this case the implications for the accounting firm that was involved proved to be insurmountable. The Andersen Accounting firm was disbanded as a result of its actions in the Enron case. Accountants must be very cognizant of the fact that there decision to be honest or dishonest about a firms? financial dealings may have a profound effect on stakeholders and the accountants themselves. ?Accountants and many Wall Street Analysts ratified and legitimized the company's scenarios and statements regarding prospects.?(Berenbeim)"
