^^Fresh Time^^

Wednesday, January 13, 2010

My Behaviors on One Day

1. Good Behavior
a. Make my mother happy (Insyaallah..) ; massaged my mother because she was very tired on her job in the house and also in the office, so I help her to clean house, cooking, wash the dishes, and so on
b. Helping my father to type something and others that he asked me because his job very heap
c. Keep smiling with other people at the college to make their heart happy
d. Attending the study of Al-Qur’an (halaqah) for fulfill knowledge of religion and also to fulfill the belief and god-fearing
e. Do some deed that care the orderliness such I didn’t throw away the rubbish everywhere to keep my environment clean. Because cleanliness is a part of iman (belief)
f. Keep wearing helmet when I went anywhere to keep safety
g. Giving a gift to my close friend to make her heart happy and keep our friendship

2. Bad Behavior
a. I felt so aggrieved when my Dad admonishing and advising me about my mistakes
b. Lying someone by phone ; when he/she asked that my parents at home or not, I lie him/her that my parents out, whereas they still at home
c. Jeering in my heart when I saw unbeautiful woman with dark skin who wear a fire-red dress
d. I neglected the time to make the some homework by watching TV and play the PS, and facebook, so when the examination come, I really confused
e. Spending the money for unimportant thing, like have lunch in the place that has expensive cost whereas after that I went home and have lunch again

Case 11.3 Giving and Spending the United Way

The United Way, which evolved from the local community chests of the 1920s, is a national organization that funnels funding to charities through a payroll deduction system. Ninety percent of all charitable payroll deductions in 1991 were for the United Way, this system however has been criticized as coercive. Bonuses, for example, were offered for archiving 100 percent employee participation. United Way system of spending also came under fire through the actions of William Aramony, president of the United Way from 1970 to 1992. During his tenure, United Way receipts grew from $ 787 million in 1970 to $ 3 billion in 1990.
In August 1992, the United Way board of director, to replace William Aramony at a salary of $ 195.000, with no perks. In September 1994, William Aramony and two other United Ways officers, including the chief financial officer, were indicated by a federal grand jury for conspiracy, mail fraud, and tax fraud. On April 3, 1995, Aramony was found guilty of twenty-five counts of fraud, conspiracy, and money laundering. Two other United Way executives were also convicted. By April 1998, donation levels were still not completely reinstated, but did increase (up 4.7 percent) for the first time since the 1992 Aramony crisis. United Way’s donation fell 11 percent since 1991 while overall charitable giving was up 9 percent. In January 2000, a federal district court judge awarded Mr. Aramony the full value of his deferred compensation plan, or $ 4.2 million. Judge Shira Scheindlin ruled in favor of Mr. Aramony because she said there was no clause for forfeiting the money if Mr. Aramony committed a felony. However, Judge Scheindlin also ruled that united Way could withhold $ 2.02 million of the amount due to cover salary, investigation costs, and interest on those amounts. Many in the nonprofit field say that the shadow of William Aramony looms over the nonprofit world.

Reading 10.1 The Fish Bowl Existence of Government

Pressure

In a government agency, the pressure can be political. For example, in Arizona, public perception about the efficacy of its Child Protective Services resulted in audits and reports and a political battle that saw the agency respond to 355 requests for information from the legislature. One audit report, using the figure of number of cases per case worker, concluded that case workers were overworked, a justification for more founds for the agency from the legislature. However, a follow-up analysis by an outsider found that the initial report included, in that per case number, cases that were actually closed. That initial number was deceptive, whether by accident or choice, and costs the agency credibility. The report was compiled during a period of intense public scrutiny and political pressure. Regardless of how anyone lands on the question of the agency, its efficacy and funding, the etical issue of honesty transcend all; do the numbers depict fairly and accurately the current status of the organization?

The same question was at the heart of all the corporate scandals. The answer was that the numbers had some footnotes, some qualifiers and caveats that were not included in the financial statements, but the numbers were released to the public. The reason is the sane, whether publicly-traded company or government agency : employes felt pressure to make the numbers do what they felt their superiors wanted them to do.

Conflicts

Conflicts from appointments and awards of contracts can develop through close connections between the board numbers and elected officials. For example, one city learned that one of the Business people serving on it citizen’s board for drug education was a partial owner, along with one of the city council members, of a drug education and rehab center that was awerded several citty contracts through the board’s approval. The citizens are often the watchdogs of government actions and when their role becomes intertwined with those who appoint them, that objectivy and supervisory roel is lost. Government agencies must step beyond statutory requirements and focus on vreating a culture of virtue ethics.

Case 9.13 Fast Food Liability

Ashley pelman, Roberta Pelman, Jazlen Bradly, and Israel Bradly brought suit against McDonald’s Corporation and several of its franchisees, alleging that in making and selling their products there have engaged in deception and that this deception has caused them to consume McDonald’s products to such an extent that they have injured their health. Their health problems include being overweight and diabetic. Three of them also have coronary heart disease, high blood pressure, and elevated cholesterol intake.
The following is an excerpt from the district court decision that dismissed the suit brought by the parents of the young people on their behalf.

As noted, the trial court dismissed the suit. However, the appellate court reversed the decision, and the case is now in the discovery and trial stage.

Case 8.14

A former executive assistant to coca-cola’s global brand director, joya Williams was sentenced to eight years in prison for her role in an attempt to sell confidential materials to pepsi. Working with Ibrahim Dimson and Edmund Duhaney, the three hatched a plan to make money by selling the confidential materials. A man named “Dirk” sent a letter to pepsi headquarters in May 2006 offering secrets for sale” included recipes for some coca-cola products and details of future promotions (these now bits were selling $ 15,000) as well as the formula for a new beverage ($75,000)

When Pepsi got the letter, it called coke, coke called the FBI, and the FBI set up a sting operation that included videotaping Ms Williams. Ms Williams was observed on the videotape putting the confidential materials, including bottles of prototype beverages identified by their eight-ounce size and plain white labels,into her personal handbag. Also as part of the sting operation, un undercover FBI agent met the infamous “Dirk” who turned out to the Dimson, on June 16 2006, at atlanta’s Hartsfield-jackson Airport. Dimson handed ober some of the documents and a beverage sample. The documents with the company logo, marked “Classified-Confidential” and “Classified-Highly restricted.” Coke later confirmed that these documents were valid and highly confidential and contained highly classified prop1.5 million. rietary information-in other words, trade secrets. The Undercover agent gave Dimson $30,000 in cash (in $50 and $100 bills) that was in a girl scout cookie box. The undercover agent told Dimson that the cash was a down payment with the remainder to come after the items were authenticated. The two then agreed that there would be more secrets coming for a total price of $ 1.5 million. According to FBiI press releases, Dimson later e-mailed the undercover agent the following.

After leaving , Dimson met in a rental car with Edmund Duhaney, and they drove to Duhaney’s home in a Deatur,Georgia. Call records showed that duhaney was in contact with Dimson and Williams on that day. Following these events, the Undercover agent arranged for a july 5, 2007 metng to transfer documents and$1.5 Million following that meeting, the three were arrested.

When news of the Arrets was made public, pepsi released a statement that included the following .”competition can be fierce, but must also be fair and legal.

William’s sentence in two years longer than prosecutors recommended because the federal judge, j owen Forrester, said, I can’t think of another case in 25 years that there’s been so much obstruction of justice.

The procsecutors indicated that Ms. Williams chose to go trial, a trial that lasted seven days, and that she lied on the stand. “Choices have consequences, and she made those choises Ms Williams testified that she had a habit of just “hording” company documents and e-mails. There was also, however, a recorded tape of her accomplies deciding how to divvy up the money among of three of them. The day after the girl scout cookie box handover, Ms Williams deposited $4000 into her checking account. She testified that the $4000 was a loan from a friend. However the friend did not testify. Duhaney created an account the next day in the name of Noblehouse Group,LLC, with the address used on the account being Duhaney’s Decatur recidence. Bizarrely, William’s residence was destroyed by fire in February 2007 within one hour following her conviction that same day.

Sunday, January 10, 2010

Reading 6.1 A Primer on Accounting Issues and Ethics and Earnings Management

When Arthur Levitt was the chairman on his speech at New York University, he spoke about companies and their efforts to use earnings management, a process in which they use accounting rules and financial manipulations to meet the goals or make their earnings seem smooth. Mr. Levitt said that many corporate managers, auditors, and analyst are participants in the game of nods and winks.
Earning management has been business practice for so long, so often, and so many that businesspeople no longer see it as an ethical issue, but an accepted business practice. Fortune magazine has even offered a feature piece on the “how to’s” and the importance of doing it.
It remains an unassailable proposition, based on the financial research, that a firms’ stock price, attains a quality of stability of earnings management. However, the financial issues, in the decision of manage earnings are but one block in the decision tree. In focusing on that one block, firms are losing sight of the impact such activities of employees, employees’ conduct, and also eventually on the company and its shareholders.
Issues on financial reporting and earnings management are at the heart of the market transparency and trust. Understanding the issue of earnings management is very important as begin of study the cases.


The Tactics in Earnings Management
Earnings management consist of action by managers used to increase or decrease current reported earnings so as to create a favorable picture for either short term or long term economic profitability.
Also earnings management consists of activities by managers to meet or exceed earnings projections in order to increase the company’s stock value.
The methods for managing earnings are varied and limited only by managers’ creativity within the fluid of accounting rules. The common physical techniques that have been around since the beginning of the commerce are as follow; (1) write down the inventory, (2) write up inventory product development for profit target (3) record supplies or next year expenses ahead of schedule (4) delay the invoices (5) defer expenditures (6) sell all of excess assets
However, in his New York University speech, chairman Levitt noted five more transactional and sophisticated methods for earnings management, there are (1) large-charge restructuring (2) creative acquisition accounting (3) cookie jar reserves (4) materiality (5) revenue recognition (6) EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) and Non GAAP (General Accepted Accounting Principles) on financial reporting.

Case 7.3 PwC and the Russian Tax Authorities

PriceWaterhouseCoopers (or known as PwC), on of the United States’ “Big 4” accounting firms, has had a tax practice in Russia since that country changed from communist rule. On of PwC’s clients in Russia was Yukos, a major Russian oil company that is now bankrupt.
Russia’s Federal Tax Service, has filed suit against PwC, alleging that it concealed tax evasion by Yukos for the years 2002-2004. The Tax Service also announced a criminal probe of PwC’s conduct with regard to its tax services for Yukos. Twenty Tax Service agents searched PwC’s offices in Moscow and questioned PwC’s employees about the Yukos account. Yuko’s lost its tax case, and has paid $9.2 million in charges for the nonpayment of taxes. However, Yukos and PwC do have the case on appeal.
Many see the battle between PwC and The Tax Service as a part of the Russian government’s ongoing battle to sell of the assets of Yukos and avoid the surrenders of the company’s assets to investor and creditors who have filed the claims. Some analysts believe that the Russian government is hoping to press PwC into revealing information that would help it take back the Yukos assets.
In PwC is found to have engaged in evasion, it loses its license to do the business in Russia, but if it turns over the information, it is likely to lose its clients in Russia.

Friday, January 1, 2010

Case 4.3.2 (Part Two) Boeing and the Employees Who Brought the Documents with Them

After the scandal of Boeing with Lockheed Martin (explained by my partner, Eka Yulianti), the CEO Philip Condit said that Boeing must and will live by the higher standards of ethical conduct. However, Condit departed abruptly on December 1, 2003. When Condit resigned, analysts, observers, employees, and others took stock of Boeing and had gone wrong. Engineer skills and ethics seemed to lose sway. As the culture of company deteriorated, Boeing missed strategic opportunity and shareholders were in revolt.
Since the time of the management shake-up and all the fallout from the documents and the defense employee recruitment, Boeing has repositioned itself and worked toward a culture change. However, the issues continue to arise. In April 2004, U.S Attorney’s Office expanded its investigation of The Lockheed Martin documents were used on NASA projects. The documents are different and involve different managers, but the pattern of abuse is same.
However, Boeing repositioned itself and refocused on its private jetliners business. As a result, Boeing has performed well. When former CEO Harry Stonecipher returned from retirement to reassume his role following Mr. Condit’s resignation, he told to business press that they are cleaning their company.
In 2005, Mr. Stonecipher was removed as CEO after the internal investigation revealed that he had had an affair with one of company executives. The affair was uncovered by an employee responsible for monitoring e-mails, and Mr. Stonecipher’s e-mails to the executive demonstrated not only an affair but also a poor judgment in the use of company e-mail. He had violated the provision of Boeing’s code of ethics; in conducting its business, integrity must underlie all company relationships, including those with costumers, suppliers, communities, and other employees. Employees will not engage in conduct or activity that may raise questions about company’s honesty, impartiality, reputation or otherwise cause embarrassment to the company.
These cases tell us that what a poor judgment impaired his ability to lead, Mr. Stonecipher. He violated his own judgment, that can’t gives good behavior for other employees.

Case 5.14 Denny’s: Discriminatory Service with a Smile

In this cases give us information about a company that has many progresses for itself and its communities. Early, Denny’s has made discrimination for its costumer, franchiser, and other communities, but after the pack, the condition is different. At the next paragraph I would like to give some explanations about it.
On March 24, 1993, a group of minority costumers filed a lawsuit against the Danny’s restaurant that was requiring its minority costumer to pay cover charges and to prepay for meals. On May 24, 1993, six Africans Secret Service agents filed suit against Denny’s, claiming the wait staff at Annapolis, Denny’s had been deliberately slow in serving them (the agents had waited fifty-five minutes), thereby effectively denying them service. Their white colleagues had been served in the timely fashion. Other Denny’s costumers who are in black complained that they were told they would have to pay first if they wanted to eat at Denny’s.
Because of those cases, in July 1993, Denny’s must settle all of that claims by signed a $1 billion pact. In the pact, Denny’s agreed to do the following; (1) buy nearly $700 million in food, paper, and supplies from black-owned business, (2) launch a training and recruitment program to increase black representation in Flagstar’s management ranks from 4.4 percent to 12 percent, (3) add fifty-three black-run franchises, (4) funnel the Flagstar’s business to black accountants, lawyers, ad agencies, and banks.
After signing those settlement, Denny’s have many progresses. Denny’s CEO now tells employees not to discriminate more. Since October 1994, Denny’s has been Save the Children’s largest sponsor. Donations for Save the Children are primarily the result of in-store coin canister donations, a ten cent donation from each All-American Slam and kids menu, and so on.
This Denny’s has been a win-win for both parties. As Denny’s national charity not only gives annual donations for Save the Children, but also gives web support programs to increase quality, out of school children that influenced by drugs, teenage pregnancy, and dropping out of high school. I’m so proud that Denny’s give the initiative provides an opportunity for local restaurant employees, franchises, and costumers to get more involved with those programs in their individual communities.
As those progresses, many magazines tell about Denny’s successfulness; such Working Woman magazine, Fortune magazine, and many awards that Denny’s get. Solving the discrimination problems or minority in working area involved in business ethics. A company must give tolerance for the minorities and settle the discrimination for having the best working condition for itself and all around communities.