Professional Documents
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Accounting definition
Practice and body of knowledge concerned primarily with (1) methods for recording transactions, (2) keeping financial records, (3) performing internal audits, (4) reporting and analyzing financial information to the management, and (5) advising on taxation matters. It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm's assets, liabilities and owners' equity. Accounting provides information on the (1) resources available to a firm, (2) the means employed to finance those resources, and (3) the results achieved through their use.
6.Financial position Double-entry book-keeping system also helps to reveal information about the financial position of the business by preparing a statement called balance sheet. 7.Control Double-entry book-keeping system keeps a detailed record of financial transactions. Therefore, the recording of financial transactions in books provides necessary information for the purpose of cost control. 8.Decision making Double-entry book-keeping system communicates financial information that is necessary for taking decisions by a business. Double-entry book-keeping system also provides necessary information to different users such as owners, managers and creditors for their decision making purposes.
ISO ISO stand for intenatiional organization for standardization. Founded on 23 February 1947, the organization promulgates worldwide proprietary, industrial, and commercial standards. It has its headquarters in Geneva, Switzerland. The three official languages of the ISO are English, French, and Russian.[3] The organization's logos in two of its official languages, English and French, include the word ISO, and it is usually referred to by this short-form name. The organization says that ISO is not an acronym or initialism for the organization's full name in either official language; rather, recognizing that its initials would be different in different languages, it adopted ISO, based on the Greek word isos (, meaning equal), as the universal short form of its name.[4] However, one of the founding delegates, Willy Kuert, recollected the original naming question with the comment: "I recently read that the name ISO was chosen because 'iso' is a Greek term meaning 'equal'. There was no mention of that in London!
The ISO structure, with one member institute per country, bridges the gap between the public and private sectors and facilitates exchange of information between regulators and businesses. In many countries, the member institute is a governmental entity, whereas in other countries, the member institute is a private entity. This part public-part private structure in different parts of the world enables ISO to develop standards and solutions that benefit both the business sector and society as a whole, making sure that one entity's interests The ISO official site are not prioritized over another.
Role of Standards
contends that "Standards make an enormous and positive contribution to most aspects of our lives." The importance of standards may be better appreciated when considering what would happen in its absence; when a product is made according to predefined standards and meets customer expectations, it is often taken for granted. However, in an environment without standards, people would very likely voice concerns about poor quality and unsafe products. Whether a business manufactures goods or provides services,when it meets standards relevant to its industry, it ensures that positive characteristics such as quality, durability, efficiency, safety and environmental friendliness are reinforced.
Importance in Society
ISO standards benefit end consumers by safeguarding their interests and by ensuring that the products and services they purchase are safe and reliable. The standards also help to reduce environmental impact of business operations by publishing accepted levels of gas and radiation emission, and controlling the quality of water, air and soil. In addition, ISO standards drive the move toward sustainable productions processes; ISO synchronizes and aligns businesses to cleaner and safer production methods by laying down operational guidelines for different industries.
What is Fraud:
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g., in science, to gain prestige rather than immediate monetary gain. A hoax also involves deception, but without the intention of gain or of damaging or depriving the victim.
What is skimming:
Removal of cash from system is known as skimming.
For-example:
Receiving toll tax money without giving receipts.
What IS NRO:
The National Reconciliation Ordinance (NRO) was a controversial ordinance issued by the former President of Pakistan, General Pervez Musharraf, on 5 October 2007.[1] It granted amnesty to politicians, political workers and bureaucrats who were accused of corruption, embezzlement, money laundering, murder, and terrorism between 1 January 1986, and 12 October 1999, the time between two states of martial law in Pakistan. It was declared unconstitutional by the Supreme Court of Pakistan on 16 December 2009, throwing the country into a political crisis. On 16 December 2009, the Supreme Court of Pakistan declared NRO unconstitutional. A 17-member bench of the Supreme Court, headed by Chief Justice Iftikhar Muhammad Chaudhry, declared the ordinance null and void.[11] The Supreme Court also said that all the cases disposed of because of the controversial ordinance now stand revived as of 5 Oct 2007, position. The court opined that the NRO "seems to be against national interests thus it violates the provisions of the constitution".Western diplomats subsequently expressed concern that Pakistan could face further instability due to this ruling, especially if Mr Zardari's political opponents try to remove him from office. However, the verdict was widely welcomed in Pakistan.
Transparency international:
Transparency International (TI) is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide. The headquarters is located in Berlin, Germany but operates through more than 70 national chapters.[1] Defining corruption as the abuse of entrusted power for private gain which eventually hurts everyone who depends on the integrity of people in a position of authority, it mainly visions for a world in which government, politics, business, civil society, and the daily lives of people are free of corruption[2].
2.Tyco
Global manufacturers Tyco International are a company that produce everything from firefighting hardware to safety products, but this was no defence when a massive financial scandal erupted in 2002. Improper use of company funds was the source of the trouble and the trail led straight to former CEO Dennis Kozlowski and ex-CFO Mark Swartz, who were found guilty of stealing $120 million, as well as being complicit in inflating the firms financial condition by over $500 million to investors to boost stock price. After a steep slide in Tycos shares in early 2002, it was revealed that Kozlowski and former Tyco CFO Mark Swartz had sold more than $100 million of their Tyco stock the year before despite public statements to the contrary. Kozlowski later resigned and was placed under investigation for tax evasion, before he and Swartz were convicted of pocketing hundreds of millions of dollars for personal ends and using crooked accounting practices and the falsification of records to cover up it up. Both men are currently serving jail sentences.
Disposal firm Waste Management Inc found itself immersed in a land-fill sized accounting controversy in 1998. While workers were carting away Americas trash, those at the top had been busy cooking the books inflating the companys earnings over a five year period by $1.7 billion, and dumping the company in the record books as the focus of the biggest accounting scandal up till that time. Waste Management had merged with USA Waste in the year the scandal broke, but financial misstatements came to light when the new CEO called for a review of the companys dubious accounting methods. To make their after-tax profits appear higher in Wall Streets eyes, the firm had massively understated the depreciation of its property and equipment. Auditor Arthur Andersen was also deemed responsible for knowingly releasing bogus and misleading reports. Still, the penalties were relatively light. While top execs were replaced, WM settled their lawsuit with a $457 million payout and the accounting firm was fined just $7 million for their part in the fiasco. Former CEO James Koenig contested claims against him in 2005, but in 2008 was ordered to pay more than $4 million for committing securities
4.AIG:
n 2004, insurance company AIG once one of the worlds largest companies found itself neckdeep in a $2.7 billion scandal. The improper accounting under scrutiny stemmed from loans that were dressed up on the books as revenue $500 million in misclassified insurance premiums that AIG hoped would boost its reserves, alleviate the concerns of potential investors, and keep stock prices strong. The problems didnt stop there. AIG was accused of rigging bids for insurance contracts and maintaining payoff agreements with supposedly independent insurance companies that were in fact under its control. Other criminal charges of deceptive accounting methods and transactions were filed, to which some execs pleaded guilty, and AIG received a $1.6 billion fine. AIG was later subject to the largest government bailout of a private company in US history.
5. HealthSouth
Global healthcare company HealthSouth was embroiled in a none-too healthy corporate scandal in which founder and ex-CEO Richard Scrushy was convicted of a slew of charges in connection with a major accounting fraud. Scrushy was accused of intimidating and otherwise coercing senior officers and accountants into concealing bogus earnings and illegally inflating balances to the tune of $2.7 billion. HealthSouth expanded rapidly during the 1990s, but book-keeping problems became apparent, coming to a head in 2003 when charges were filed against Scrushy, alleging he had tricked expectant stockholders into thinking the company had met its financial targets. In the fallout from this grossly exaggerated creative accounting, it became apparent that a group of top lieutenants, known as the family and under Scrushy;s command, had been involved in fiddling HealthSouths financial statements. Scrushy was later acquitted due to lack of material evidence, but in 2006 he was found guilty on bribery charges, and in 2009 a judge ruled him responsible for the fraud and ordered him to pay $2.87 billion in damages.
6. World com:
WorldCom, Americas second largest long distance phone company, was at the centre of a massive $11 billion accounting fraud exposed in 2002. Under the direction of CEO Bernard Ebbers, a circle of chief executives CFO Scott Sullivan, Comptroller David Myers and Director of General Accounting Buford Yates devised a scheme to mask the companys failing profitability. This was done mainly by misreporting interconnection expenses with other telecom companies and overstating cash flows by $3.8 billion with false financial reporting. A faade of fiscal growth was created to shore up the value of WorldComs stock from which Ebbers earned a fortune. However, the company stock fell after 2000 which saw Ebbers up to his neck in margin calls and under pressure to safeguard the shares he had used to fund his other ventures. With the boards approval, he helped himself to corporate loans worth over $400 million, costing investors a cool $180 billion and employees an estimated 30,000 jobs when WorldCom went bust. Ebbers was sacked after internal auditors worked in secret to uncover the fraud and is now serving a prison term for fraud and conspiracy. Corrupt doesnt come close.
7.Enron When Houston-based energy giant Enron collapsed in 2001 it was to go down as the mother of accounting frauds and the biggest audit failure ever. Led by company chief Jeffrey Skilling, a team of shady executives used tools such as special purpose entities (names included JEDI, Whitewing and Chewco) to conceal losses and inflate earnings. Dubious financial reporting obscured the companys finances from shareholders and analysts, while aggressive high-risk practices made for barely recognisable accounting. The white collar cowboys were able to keep multi-billion dollar debts from bungled deals off the books, positively portraying the firms performance. However, things culminated in what was the then largest bankruptcy ever as share prices tumbled from $90 to less than $1 in barely a year. Skilling, founder Ken Lay, CFO Andrew Fastow and the other crooked execs were given varying jail sentences for their involvements, while leading auditor Arthur Andersen was dissolved, having turned the blindest of eyes and shredding key documents. Shareholders lost $74 billion and workers billions more.