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For example, mergers and acquisitions are perceived as the latest fashionable trend to grow the company market share and profitability due to synergies affect. But as the practise has shown, out of the latest mergers, about 75% did not perform as they were expected by the top management.
The Sarbanes-Oxley Act was aimed to facilitate and solve some of these very difficult problems in the accounting and management of the companies. The companies now are restricted to the amount of intangible assets they can show in their balance sheets, which reduces the moral opportunism problems in the company. The company has also currently to hire the auditors which are completely independent from the management of the company and cannot carry out any other than audit services for the company. This solves the problems of insider trading, where the management take advantage of their internal knowledge of the real company situation. On the other hand, the agency problem, though is aimed to be solved, is at much higher cost for the companies now. Also, the auditors are currently under a very big pressure currently to confirm the very big numbers of the intangible assets of the companies.
Previously, as the auditors were heavily involved in the businesses of the company, the moral of the corporate governance suffered. Also, the company has to hire independent directors which is aimed to solve the ethics problem when the directors make the decisions not in the best of the shareholders, creditors and good name of the company, but for their personal wealth. The amount of loans which could be granted to the top management is reduced which solves the possible opportunism by the management. In general, the Sarbanes-Oxley act was aimed to reduce the utilitarianism behaviour of the managers who are tempted to receive the greatest amount of benefits and pleasure possible over the pain of the other. On the other hand, the amount of the reduced bonuses to the top management can create other ethics problems where the management is not sufficiently motivated to perform their best as they would not feel their personal efforts are rewarded as they do not have the stake in the company.
To summarize, the issue of corporate governance morality and ethics needs very in depth revising by the global guru in corporate governance. Though all the countries have very different mentalities and business practices, but accounting for the fact that all of them are striving to perform well in the global arena, world wide global ethics must be worked out and decided upon: whether to achieve sustainable economic growth couples with environmental friendliness and promotion of balance in the treatment of personal and business ambitions with ethics, or to go on another root. The morals must then be adapted by each country slightly to account for specific differences and the government together with the society must decide on the cost they are ready to give up to achieve wealth growth: to decide what is acceptable in the business and what must be punished very heavily as it destroys the morals within the society. After that, the rules must be applied within the companies with top management being heavily devoted to achieving company growth balanced with ethics. The mission and vision must include these issues. Top management must send the signals to all the other staff that the priority is the ethics and morals.
Obviously, that the natural selection principle contradicts with the morals being used in the society, but aren't we different from the animal world exactly because we can think over wisely and reason each our action and natural survival instinct? Or are our corporate governance practices just a very loud sign that our society morals are indicative of "de-evolution" and turning us back from wise human beings?
Available from www.wikipedia.org
Brealey, R., Myers, SC. Fundamentals of Corporate Finance, 4th Ed., McGraw & Hill, 2004.
Abrams, J. Quantitative Business Valuation: A Mathematical Approach for Today's Professionals, McGraw-Hill, 2000.
Available from: www.wikipedia.org
Brealey, Meyers, Fundamentals of Corporate Finance, 3rd Ed., McGraw & Hill.
Quantitative Business Valuation.
Ethics (BA Accounting)[continue]
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This can hurt the returns of the portfolio over the long-term. Although legally not all information must be disclosed, should companies be obligated to disclose the true nature of investor risk? Or are investors responsible for determining such risk? Yes, under the Securities and Exchange Act of 1934 all firms must provide material changes in their financial condition to regulators. However, investors also need to understand that investing in common stocks
In addition, there is no requirement, per se, for a master's degree; Within the total hour requirement, 36 semester hours of accounting and/or tax courses above the principles level and 39 semester hours of general business courses, including six semester hours in business law (Uniform CPA Exam). The Uniform CPA Examination consists of four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR) and
The amount and complexity of information created and overseen by the auditors in terms of expenses, earnings, and taxes will also increase. The ongoing growth of global organizations is also demanding greater auditing expertise concerning international laws and trade in addition to international mergers and acquisitions. Following Enron and the other financial scandals, Congress passed laws to curtail organizational accounting fraud. This legislation requires public companies to maintain established internal
As both carriers, are concerned about addressing the various provisions in: the Companies (Audit, Investigations and Community Enterprise) Act of 2004 and Sarbanes-Oxley. This is accomplished by tackling those issues that contributed to a host of moral dilemmas through their ethics policies. As a result, they are addressing these regulations by: implementing new standards that are reflected in the code of ethics. Once this occurs, it means that it
" (p. 4) This is to make the argument that it should be seen as a practical reality of this new business atmosphere that responsibility to the social realities and standards of an operational setting will be directly predictive of long-term survival, stability, functionality and survival. That stated, it should also be seen as incumbent upon the global alliances created by the process of free trade to impose standards of corporate
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