Recent incidences of corporate or banking scandals happened in U.S Essay

Recent incidences of corporate or banking scandals happened in U.S companies or financial insitutions - Essay Example At the same time, the Lehman Brothers reduced assets on the left side of the company’s statement of financial position. The Lehman Brothers also systematically used the repos to finance some projects. Instead of reporting that the repos were used for financing reasons, the Lehman Brothers disclosed the repos as asset sales to mislead investors (Elliott and Treanor 5). This allowed the Lehman Brothers to use the proceeds gained from the repo to reduce its leverage right just before the reporting period. By September 2008, the repo proceeds had reached $50 billion resulting in bankruptcy. The investigators were amazed to learn that this amount was even more than the bonds that were due at the time General Motors went bankrupt the previous year. The repo proceeds were also comparable to the gross domestic product of Switzerland in 2008. Amazingly, the top executives of the company then, including its CEO Dick Fuld denied any knowledge of the company’s use of Repo 105 (Elli ott and Treanor 5). It was also amazing that Ernst & Young, the leading audit firm for the company gave unqualified report without noting the misstatements in the company’s books of account.... From the analysis of the case, it became apparent that the company’s top executives made serious errors of business judgments, which ought not to have occurred. For instance, it was unethical for the top executives of the company to mislead investors of the real picture of the company by manipulating the balance sheet. As earlier indicated, the Lehman Brothers tried to stop its demise by falsifying the balance sheet to deceive investors about its true financial picture. This was unethical act, which executives ought to avoid. The company’s financial statement is very important since it shows investors how the company is performing, which also influence their investment decisions (Goldmann and Hilton 21). According to the accounting and auditing standards, the top executives of the company were supposed to report the real financial position of the company. The Lehman Brothers also breached the corporate governance and management ethics by using Repo 105 to manipulate its balance sheet. In this regard, we realize from the case that the Lehman Brothers diverted $50 billion of its toxic assets from its balance sheet in the early 2008 rather than disposing of the repos and reporting the same at a loss. After doing so, Wolff observed that the lack of strong internal control allowed the Lehman Brothers to treat the repo 105 transaction as proceeds instead of financing (2). To make matters worse, the chief financial officer was found to have sent emails indicating that repo 105 should be used to reduce liabilities in the statement of financial position of the country. This was indeed a serious breach of accounting principle. In addition, the top executives of the company failed to disclose the repo 105 to the rating agencies,

Narration Essay Example | Topics and Well Written Essays - 500 words

Narration - Essay Example It was a pleasant fifteen minute walk. We joked the entire way and enjoyed the much awaited warm breeze swooshing though the trees. Finally the library came into view. It was a small, single level brick building, situated at the corner half covered by tall green trees. We stepped inside and were met by a smiling elderly lady. She escorted us to a corner in the children’s section and seated us at the small wooden and colorful benches designed for kids. Our teacher looked comical, hunched down on a purple stool, her knees bent at an odd angel because there wasn’t any room. The librarian proceeded to tell us about the general rules of etiquette of the library. I tuned out and busied myself in observing the quaint and serene atmosphere. For some reason, the quietness of the library and the overwhelming feeling of being surrounded by so many books put me to awe. I didn’t know why but I loved everything about this ordinary little building. The softness of the carpet beneath my sneakers, the quiet rustling of the indoor plants, the soft and soothing overhead lights, and the smell of new and old books mingled together gave me a sense of calm and comfort. I was jolted by the sudden sound of everyone getting up and snapped out of my daydreaming. The librarian, along with our teacher, was ready to give us a brief tour of the library. The building was basically divided into two sections, the adult and the kids. The checkout desk in the middle separated the two areas and was surrounded by a low shelf filled with bright blue encyclopedias. The librarian picked up a bunch of sheets from the desk and brought us back to where we were seated before. The time had at last come to fill out our individual applications. I felt strangely grownup as I carefully penciled in my name and phone number. We all handed in the applications and the librarian told us to look around because we could each take home two books of our own choosing at the end of the