Conflicts of Interest in Auditing and Consulting

Conflicts of Interest in Auditing and Consulting Conflicts of interest: how can the provision of consulting and advisory services be consistent with the requirements of auditor independence? One of the key issues identified as a cause of the Enron scandal is that the company managed to provide misleading financial information to investors and analysts over a period of several years, indicating around $100 billion of annual revenues. However, once the accurate numbers emerged showing the state of the company’s balance sheet, lenders withdrew their funding; the SEC increased the pressure on the company; and the company went bankrupt in less than two months. Sloan et al (2002) argue that the only way to avoid such incidents happening is to discourage companies from producing dishonest numbers, whilst making auditors afraid of certifying anything which could be seen as misleading. In general, the principle of auditor independence should mean that auditors are vigorous and unrelenting in their verification of accounting data. However, in the case of Enron, the auditors: Arthur Andersen, were signing off significant amounts of accounting data from their own consulting arm, who were providing Enron with consulting and advisory services. As such, there was likely physical evidence that Arthur Andersen’s auditors ignored several material accounting violations caused by both Enron and Arthur Andersen’s consultants. Unfortunately, it is difficult to prove this evidence given that all documents related to Enron were shredded by the auditors as soon as the scandal came to light, making it difficult to be certain around the extent of the complicity or the conflicts caused by Arthur Andersen providing Enron with substantial amounts of consulting services, at the same time as signing off company accounts which were later found to be almost completely inaccurate (Sloan et al, 2002). As a result of this, the legislation governing publicly listed companies in the United States was rapidly tightened through the Sarbanes-Oxley, or SOX, Act; which was intended to boost investor confidence. This legislation was based on the argument that a stock market is formed from a collection of share issuing firms; individual and institutional investors; and a body of accountants, lawyers and analysts. As such, the SOX Act was intended to ensure that each of these groups regained their own confidence in the system, and also confidence in each other. As such, the Act focused on promoting transparency and understandable data from the viewpoint of the final users of accounting data, rather that the provider (Kalafut, 2003). The main method by which SOX attempts to minimise and avoid conflicts of interest within the firm is by requiring corporations to establish corporate auditing committees; which are responsible for dealing with the auditors. This is because, previously, if auditors had any queries around the content of the financial statements, they had to seek out the management personnel responsible for generating the data. This meant that the managers could potentially shape the auditor’s interpretation of the information, particularly if the auditing company were also providing consulting or advisory services as occurred at Enron. In such an instance, the advisory staff may well themselves have exerted influence over their own auditors to ensure that the information was treated in a way that is favourable to the consultants, and not in a way that provided a true representation of the actual situation and data. The audit committee is supposed to avoid this by ensuring that the auditors only communicate with the committee members, who are all independent from the management of the firm, and hence can look at any advisory services provided by the auditor with an independent and critical eye (Lansing and Grgunch, 2004). As a result, the act also recommends that one of the audit committee members should be a financial expert with a good knowledge of accounting principles and financial statements from a firm or firms in similar industries. This allows the committee to accurately discern the true nature of any financial instruments, such as the off balance sheet financing and other special purpose entities used by Enron to cover up its financial difficulties. This will also be vital if an auditing firm is providing significant non auditing services, as they may well use their auditing experience to advise their client on how best to structure their business to present it more favourably from an a ccounting point of view. Financial experts on the audit committee will have similar experience, and hence will be able to help the auditors make a fair assessment of the true nature of any creative accounting. The other main part of the SOX Act which is designed to minimise any conflicts between the provision of consulting services and advisory services is that the penalties for being caught have been increased dramatically. In particular, the Act has increased the penalties which any CEOs and CFOs found guilty of violating any provisions of the Act would face. As part of this, CEOs and CFOs now have to sign off on the audited accounts and other statements that their companies file with the SEC, and will thus be held responsible if they certify statements which contain any false or misleading information. CEOs and CFOs who do so could face fines of up to $5,000,000 and potentially imprisonment for up to 20 years. As such, this places a significant responsibility on CEOs and CFOs, who are typically the board members responsible for appointing auditors and any advisory services, to ensure that there is no conflict of interest between the auditing and advisory services provided. With all this regulation, one would expect that the disadvantages of auditors providing their audit clients with other services would be so great that many companies would not even consider it. However, it is important to note that there are some benefits which can be obtained within the current legal and regulatory framework. For one, Marks (2007) argues that auditors’ in depth knowledge of their clients’ and comparable firms’ accounts can allow them to advise firms on their governance processes, efficiency and other aspects of their financial performance and how to improve them. In addition, audit firms will be better able to advise firms how to legally avoid as much tax as possible, whilst avoiding anything which could be considered tax evasion. This is particularly important in the modern business world, where the removal of exchange controls and trade barriers makes tax avoidance more possible than ever before, but also provides significant potential for com panies to fall foul of one or more of the tax regimes in which they operate (Sikka and Hampton, 2005). This helps to explain why many auditing firms also have large tax practices, as well as advisory services. In contrast, the only real disadvantage of a company providing both audit and other services is the potential for regulatory violations and conflicts of interest. Of these, the potential regulatory violations were immediately seized on by the US Congress following the Enron scandal, as it emerged that Enron paid Arthur Andersen $25 million in auditing fees, but a further $23 million in fees for other consulting work. However, it was the potential for conflicts of interest which emerged as the strongest disadvantage, with many corporate boards worrying that continuing to buy consulting services and auditing services from the same firms would damage investor confidence, and lead to a drop in share prices (Kahn, 2002). As a result, of the Big Four accounting firms currently in the market: Deloitte, Ernst and Young, PWC and KPMG; PWC stopped providing consulting services to audit clients; Ernst and Young sold it consulting business and KPMG and Deloitte both divested of their consulting businesses throughout 2001 and 2002 (Kahn, 2002). This meant that none of the Big Four auditors, which together audited around 90% of the major companies in the US and UK, provided any substantial consulting services following the Enron scandal, although they did continue to provide tax and some transactions advisory services. However, by 2003 Deloitte had reversed its decision, and brought the consulting business back into the overall business, which then comprised auditing, tax accounting, corporate finance and consulting. This decision was taken in spite of industry concern around conflicts of interest and the provisions of the SOX Act, in the belief that Deloitte could provide its clients with the advantages of i ntegrated professional and accounting services, whilst avoiding any of the potential regulatory concerns (Bryan-Low, 2003). Indeed, five years after the Enron scandal, Accountancy (2006) reported that the majority of accountancy firms, particularly the Big Four firms, have begun offering a wider range of services, and that the boundaries between these services are blurred, with inconsistent levels of disclosure. For example, PWC details specific revenues for audit, accounting and tax; however it also includes ‘advisory services’ in its revenues as an umbrella term for consultancy, corporate finance, and corporate recovery services. Also, whilst KPMG details separate categories including corporate finance, forensic accounting, transaction services and risk advisory services, the ‘risk advisory’ services are effectively the same as the consulting work offered by other accounting firms (Accountancy, 2006). This indicates that, even if the regulatory conflicts can be completely resolved, it will be difficult for shareholders to assess the true nature of their auditor’s revenue s, and hence the potential for any damaging conflicts of interest. Unfortunately, future steps to address any issues as a result of this are likely to be hampered by the fact that SOX is already proving a significant regulatory burden to publicly listed companies in the United States. In addition, Fisher and Quick (2004) claim that the true problem is not the conflict between auditing and other services, but the fact that the Big Four accounting firms are so dominant, auditing all of the FTSE 100 companies in the UK. With there being no true competition to the Big Four amongst their main clients, the market has come to resemble and oligopoly, and with many senior accountants at clients coming from the Big Four firms, there is a danger that former accountants working in senior management may simply favour their alumni firms when choosing auditors. Whilst this should be mitigated by the presence of the audit committee, minimising the impact of this ‘old boys’ network’ amongst the major accounting firms would go a long way towards r educing any potential conflicts of interest, and increasing the scrutiny given to the provision of additional services, particularly amongst the Big Four. In conclusion, and as the Enron scandal demonstrated, whenever an auditor of a publicly listed company also obtains significant revenues from providing their client with additional services, there is always the potential for a conflict of interest. In Enron’s case, this led to Arthur Andersen covering up significant losses which ultimately caused Enron to go bankrupt. The SOX Act should help to reduce this, by enforcing the use of an audit committee to prevent such conflicts, and increasing the pressure on executives to ensure that accounting data is fair. However, most of the major accounting firms continue to provide these services, hence the potential for conflict of interest remains. Possibly the only way to avoid this would be to attempt to break up the dominance of the Big Four, and create a more competitive market where the top firms have a wider choice of auditors, and hence can hold these auditors to higher standards of quality and transparency. References Accountancy (2006) Blurred boundaries. Accountancy; Vol. 137, Issue 1355, p. 35. Bryan-Low, C. (2003) Deloitte Chief Wrestles to Get Consultants Back in Firm. Wall Street Journal Eastern Edition; Vol. 242, Issue 33, p. C1-C7. Fisher, L. and Quick, C. (2004) The Big Four old boys club. Accountancy; Vol. 133, Issue 1327, p. 29. Kahn, J. (2002) Deloitte restates its case. Fortune; Vol. 145, Issue 9, p. 64-69. Kalafut, P. C. (2003) Communicate Value to Boost Investor Confidence. Financial Executive; Vol. 19, Issue 5, p. 28-29. Lansing, P. and Grgunch, C. (2004) The Sarbanes-Oxley Act: New Securities Disclosure Requirements in the United States. International Journal of Management; Vol. 21, Issue 3, p. 292-299. Marks, N. (2007) Internal Audits of Governance. Internal Auditor; Vol. 64, Issue 6, p. 31-32. Sikka, P. and Hampton, M. P. (2005) The role of accountancy firms in tax avoidance: Some evidence and issues. Accounting Forum; Vol. 29, Issue 3, p. 325-343. Sloan, A. Isikoff, M. Hosenball, M. and Thomas, R. (2002) The Enron Effect. Newsweek; Vol. 139, Issue 4, p. 34.

Life of Pi: Use of a Unreliable Narrator Essay

â€Å"An unreliable narrator can draw you into his or her worldview and perhaps even make you take sides before a writer reveals a broader perspective, one that he/she has missed or omitted. Even if a story is written so you doubt the narrator from the beginning, an unreliable narrator is still the one taking you through the story, so you hang on to their words. Perhaps a certain dialogue or an event will uncover details the narrator does not realize and expose that as an unreliable narrator, their word can no longer be trusted†. (Jada Bradley). In the book Life of Pi, Pi reveals himself as an unreliable narrator. Although Pi defines himself as an unpredictable narrator through the final events in the story, Pi gives hints of false information throughout the book. As a reader, you hang on to his words because he is the one taking you through the account of his epic journey. Pi in the final scene of the story after his journey across the Pacific, tells the Japanese Oceanic Authorities contradicting stories. â€Å"Pi: So, you didn`t like my story? Mr.Okamoto: No, we liked it very much. Didn’t we , Atsuro? We will remember it for a long, long time. Mr.Chiba: We will. [Silence] Mr.Okamoto: But for the purposes of our investigation, we would like to know what really happened. Pi: What really happened? Mr. Okamoto: Yes. Pi: So you want another story? Mr. Okamoto: Uhh†¦no. We would like to know what really happened.† Pi leads you to believe that he is only making up the second account to satisfy the two men`s disbelief in his first story. However, if you reexamine the book you find that the second report could actually be a true account. Now you see that there are two valid stories, and the reader must choose which story is accurate based on their own conclusions about Pi. Throughout Pi`s journey there are doubtful events that hint at his unreliability as an narrator. These incidents can influence your choice on which story you find factual, like sketchy witnesses in a crime investigation. For instance, during his voyage, Pi encounters another blind castaway who jumps on Pi`s boat to kill him but, is killed by Richard Parker. This event is extremely unrealistic, for the possibility of two blind castaways encountering each other in the world`s largest ocean is simply far-fetched. You may sense some disbelief in this occurrence yet, you still trust his word. For Pi hasn`t yet given the reader a reason to disbelieve him as the narrator. Pi`s story from the boat sinking and the loss of his family, to his terrible journey across the Pacific Ocean is a horrible tragedy. You mourn for him and his horrible situation and through this sorrow you don`t realize that he could be making this all up. Usually when you read stories you want the main character to have a happy ending. However, in Life of Pi, when you discover you can no longer trust Pi`s account, you lose your remorse for him and his predicament. Crossen states this plainly in her Wall Street Journal article on unreliable narrators, â€Å"Unfortunately, to point out that a book has an unreliable narrator is to spoil the thrill of losing your innocence.† Cheering for the main character becomes vile when you have lost trust in their word. Pi`s first account of a boy and a Bengal tiger surviving a journey across the Pacific Ocean is fantastic tale but somewhat believable. However, by the end of the novel our perception of Pi as the storyteller has been tainted. Our perspective of anyone`s account of their lives depends on our own experiences and knowledge. As David Fromkin states in The Way of the World, †Life is a story that each of us tells to his or her self; and it therefore is a tale told by an unreliable narrator.†

Human motivation Essay

Introduction: A person is a complex creature who goes through a variety of developmental changes in his life. Each of these changes, a particular learning occurs. When we learn, we organize, shape, and strengthen our brain. Humans are like machines who never get tired of learning. From the day we are born, our brain works and encode those that we have learned in the web connections of our brain. But what does learning mean? Learning is how one acquires new information about the world he lives in. It is how he interprets and understands reality in a way that his behavior changes because of those learned information or knowledge. Learning is also said to be an active process in which the learner uses sensory input and constructs meaning out of those things that has to be learned. The learner needs to do something to be able to learn because learning is not just a passive acceptance of knowledge and ideas of a person alone, but rather, an activity or process which involves the learner to engage with the world he is in. Motivation on the other hand is a key component in learning. Essential because it includes an understanding of ways in which the knowledge can be used. Unless we know the reason why, we may not be very involved in using the knowledge that may be instilled in us, even with the most intensive, severe, rigid, and direct type of teaching. When one is not motivated to learn, teaching becomes ineffective and useless. Motivation is an inner state of need or desire that activates an individual to do something that will satisfy that need or desire. Motivation is derived from the need or desires internal to the individual such that others cannot motivate an individual but must manipulate environmental variables that may result in an increase or decrease of motivation. The relationship between motivation and learning is connected and are mutually causal. That is, those individuals, â€Å"who are more motivated learn more†¦those who learn more become more motivated† (Richmond, 194). In classroom settings, the teacher uses an understanding of individual and group motivation and behavior to create a learning environment that encourages positive social interaction, active engagement in learning and self motivation. Knowing how to meet individual learner’s needs for control, competence, and belonging in the classroom is one key to student motivation to learn. Following are examples of learning as tied to human motivation. Teacher Rose is a regular teacher of 45 students in a public school. Three of her students are repeaters and two manifests symptoms of mild retardation. Their presence in class causes her stress and anxiety not because she don’t want these children there but because she feels like she is not able to help them as she‘s supposed to be. Since there are no special schools in the place to cater the needs of these children, she decided to apply for a scholarship at the district office to study Special Education. The process was not an easy one but because of her desire to help these children, she was able to graduate and earned a degree in Special Education. Now she’s more fulfilled and happy because she is able and capable of teaching and handling these types of children. Sir Benjamin on the other hand is a teacher who wishes to become a lawyer someday. But due to poverty, this dream remains only a dream. When he got married and belittled by his in-laws, Sir Benjamin vowed to become a lawyer to prove that he can be somebody someday, a person his in-laws would respect and be proud of. When his marriage was annulled due to insistence of his in-laws, Sir Benjamin applied for a scholarship in a university to pursue his studies in Law. After painful years of studying and teaching at the same time, he was able to graduate and pass the board exam. Now, he is already a lawyer. Although he was not able to win back his beloved wife, he is still happy and proud because at last, he was able to fulfill his dream and was able to prove himself at the same time. Jane is also an example of a person who was able to fulfill and finish her studies because of her desire to help her parents. Due to poverty, Jane wasn’t able to pursue college education. She went to work in a restaurant for two years. When given a chance to apply for a scholarship at the Mayor’s office, she didn’t hesitate to ask permission from her employer. Working during the day and studying during the nights. The process was long and hard and yet she was able to graduate. She was very motivated to finish her studies because she needs to get a descent job so she would be able to send her younger brothers and sisters to school. Now, she works in a bank, a lot more comfortable and happier because she’s able to fulfill her dreams. Motivation therefore comes from within, and most people with intrinsic motivation are most likely to succeed.

Degree in Criminal Justice Use a Criminal Justice Background to Work as a Paralegal 2019

According to the U.S. Bureau of Labor Statistics, job growth in the paralegal field is expected to be 27% or more through the year 2018. The driving force behind this predicted increase is the attempt to provide more affordable and efficient availability of legal services in the coming years. Although many students enter the profession through formal paralegal training programs, a degree in criminal justice is an alternative path to joining the rapidly expanding discipline of paralegal studies. What is a Paralegal? Paralegal jobs with a criminal justice degree involve many of the same tasks performed by an attorney. Lawyers delegate tasks, such as researching facts and preparing documents for court, to the paralegal with a criminal justice degree. Paralegals are also able to help draft contracts, mortgages, separation agreements, and tax returns. In fact, the only activities paralegals cannot legally perform are the five activities categorized as practicing law: giving legal advice, signing legal pleadings and papers on behalf of a party, appearing in court on behalf of another, and setting and collecting fees for legal services. Paralegals use legal terminology, and document their findings and opinions related to assigned cases to a supervising attorney. As the law becomes larger, professionals who pursue a paralegal career, with criminal justice degree credentials, typically specialize in a certain area of the law. Possible areas of concentration include labor law, intellectual property, criminal law, immigration, and real estate. .u974de7f8ba8b0b0d8b9a4f9998575df3 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #34495E!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u974de7f8ba8b0b0d8b9a4f9998575df3:active, .u974de7f8ba8b0b0d8b9a4f9998575df3:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u974de7f8ba8b0b0d8b9a4f9998575df3 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u974de7f8ba8b0b0d8b9a4f9998575df3 .ctaText { font-weight:bold; color:inherit; text-decoration:none; font-size: 16px; } .u974de7f8ba8b0b0d8b9a4f9998575df3 .post Title { color:#000000; text-decoration: underline!important; font-size: 16px; } .u974de7f8ba8b0b0d8b9a4f9998575df3:hover .postTitle { text-decoration: underline!important; } READ Earning a Bachelor's Degree in Paralegal StudiesEducational Requirements to Work as a Paralegal There are approximately 1,000 official paralegal training programs at the associates degree, bachelors degree, and masters degree level. However, many professionals choose to use a bachelors degree in criminal justice to enter the field. Often employers will provide on-the-job training in legal activities for the worker with a criminal justice degree or a bachelors degree in a related discipline. In addition to earning a bachelors degree in criminal justice, there are also formal certification and training programs available. Certification as a paralegal is not required for employment, but it may increase competitiveness in the job market. Opportunities for Advancement as a Paralegal As with many other occupations, as a paralegal gains more experience, he or she is typically given more responsibility and less supervision on the job. A paralegal career with criminal justice degree credentials may also lead to supervising other paralegals or obtaining a management position within a law firm or corporate legal department. Some paralegals also choose to go on to law school after gaining experience in the legal field. Working as a paralegal can offer insight into a professionals interest in law, can teach legal terminology, and can provide case reading prior to even stepping foot in a law school classroom. .uf6cc840de0d8f959d63d1b008866ba77 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #34495E!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .uf6cc840de0d8f959d63d1b008866ba77:active, .uf6cc840de0d8f959d63d1b008866ba77:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .uf6cc840de0d8f959d63d1b008866ba77 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .uf6cc840de0d8f959d63d1b008866ba77 .ctaText { font-weight:bold; color:inherit; text-decoration:none; font-size: 16px; } .uf6cc840de0d8f959d63d1b008866ba77 .post Title { color:#000000; text-decoration: underline!important; font-size: 16px; } .uf6cc840de0d8f959d63d1b008866ba77:hover .postTitle { text-decoration: underline!important; } READ Online BSN Program Do Employers Differentiate between ADN and BSN NursesEarning a Degree in Criminal Justice A host of criminal justice degree programs exist as well. Typical programs, such as the criminal justice degree online offered at Warren National University, offer education in both administrative and hands-on aspects of the field. Students working towards a bachelors degree in criminal justice study courses such as: administration of justice, criminal investigation, written communication in criminal justice, and the American court system. Florida Metropolitan University Online has a Paralegal Associates Degree as well as a Paralegal Bachelors Degree for students interested in the field. Kaplan University offers an Associate of Arts and Sciences in Paralegal Studies and a Bachelor of Science in Paralegal Studies. Their Bachelors Degree in Paralegal Studies extends to its students such specializations as Alternative Dispute Resolution, Office Management, and Personal Injury. Kaplan also has an advanced program for their bachelors degree called Advanced Start in BS Paralegal Studies. .u5f7dbaf4bd1ff8165127d0b97a19120d { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #34495E!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u5f7dbaf4bd1ff8165127d0b97a19120d:active, .u5f7dbaf4bd1ff8165127d0b97a19120d:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u5f7dbaf4bd1ff8165127d0b97a19120d { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u5f7dbaf4bd1ff8165127d0b97a19120d .ctaText { font-weight:bold; color:inherit; text-decoration:none; font-size: 16px; } .u5f7dbaf4bd1ff8165127d0b97a19120d .post Title { color:#000000; text-decoration: underline!important; font-size: 16px; } .u5f7dbaf4bd1ff8165127d0b97a19120d:hover .postTitle { text-decoration: underline!important; } READ How to Prepare for an InterviewAttending an online college for a criminal justice degree can be a convenient way to maintain work and family responsibilities and gain access to programs that would otherwise be unavailable in some locations. The occupation of paralegal encompasses a wide variety of activities and career paths. Salaries range from $34,000 with state government positions to more than $80,000 for private law-firm positions. Becoming a paralegal is just one job option for the versatile degree in criminal justice and can lead the way to a lucrative, stable career or be followed by a challenging three years of law school. Related ArticlesParalegal Degree Options OnlineEmployment Opportunities With an Associates Degree in Criminal JusticeFind Law, Criminal Justice, Social Science Degree ProgramsAssociate Degree in Criminal Justice Boost Earning Potential and Streamline into the Criminal Justice WorkforceDegree Programs for the ParalegalEarning a Bachelors Degree in Paralegal Studies