The Current Economic Climate Essay Example | Topics and Well Written Essays - 750 words

The Current Economic Climate - Essay Example There are some challenges and biggest opportunities facing with new managers entering an industry. The global environment has continuously become a challenge to emerging managers. This reminds them of a very important thing and that is for them to acquire useful skills in order to reach a high level of competitive advantage. For instance, in the age of information technology (IT), it is no longer reliable and enough to rely on traditional management system. Modern managers must be able to have important knowledge on how to integrate his or her leadership skills in the midst of substantial breakthroughs in areas of IT. This is a great challenge among those managers who were trained without prior exposure to a high level of advancement in IT. Very few companies offered IT programs in the onset of online communication, technological innovation in information management system and so on. In fact, many managers nowadays are not that adept in using various features in IT in leading their p ersonnel especially in companies that require constant communication and interaction on a daily basis. However, this is an advantage among those emerging managers who are mostly adept and have substantial background in IT. They can all integrate their knowledge in IT in their leadership and in fact, this would make them highly competitive in today’s prevailing economic climate. It is the current global trending that for a company or organisation to stay on top and be a cut above the other, various management modifications are necessary and application of IT is just among of them. Management on the other hand is such a complicated process because it deals personally with the human resource with also complex behaviours and needs. Thus, all managers are faced with substantial challenges especially on motivating and applying their skills in the work place, but above all they all are tested with their commitment (Hawell, 2009). All of these are essential factors in achieving goals of the company. Thus, those managers who are committed are more willing to seek for more information on how to improve performance of their personnel and one of the basic approaches is motivating them. To motivate the entire human resource is another great challenge. In times of downward spiraling economy for instance, the managers must be able to apply substantial moves especially among those employees who are asking for more financially from the economic stand point. It requires not just constant communication, but ample opportunities in motivating them even without the need to use monetary equivalence. In other words, the managers must be able to apply their skills and full potential in creating more innovative approaches in motivating the human resource to function effectively most especially in both promising and challenging economic times. This is both a challenge and opportunity for emerging managers as they would substantially focus on innovation, and apply modern approach in management. Another point, every business is faced with competition and this is how it is for the rest of almost all organisations around the world. Competition simply is everywhere. Thus, every manager therefore must be geared with substantial knowledge on this issue. A facilitative style of leadership might be required and that would ensure substantial use of communication process (Hartwig, 2008). In this approach, emerging managers have the full advantage as they

Discussing Frankenstein Essay Example for Free

Discussing Frankenstein Essay Living in a society, we are accustomed to completing tasks within minutes if not seconds. With this fact in mind, it is very difficult to comprehend the amount of painstaking labor of Victor Frankenstein. The long days eventually turned into months and then into years. Victor observed worms in a graveyard, collected materials, and painstakingly created a being, complete with the intricacies of a human body and mind. After the realization of his greatest achievement, Victor looked upon the lifeless individual as his creation. As the father of this illegitimate being, Victor is already physically and morally responsible for the creature. Since the very beginning of the experiment, Victor was entrusted with this being. Once the creature opened his yellow eyes, Victor relinquished his task to educate his design. Instead of worrying over the creatures welfare and the interest of others, he drove from his mind all thoughts of the experiment. The monster was left to fend for itself, learning the basic essentials of survival by what he saw an the only food he could find. Only until the monster hurt something of significance to Victor, did the scientist feel accountable. It is no doubt the monster is now evil. His unanswerable question in life is why am I here? The man who gave him life fled from his side just like the rest of society. Victor, at this point in the story, has a choice. The scientist can either make another life form or suffer earthly torments from the monster. By not completing the request of the creation, Victor handed over the lives of his family and friends. Again, Victor can be held morally responsible for the deaths. Creation tells him to make another life form and everything will be alright. The scientist never realized his mistakes. If he has only taken care of his creation, the deaths of his father, wife, brothers, and sisters could have been avoided. With such a brilliant mind, Victor could have been one of the brightest minds in science. If it were not for the irresponsible beginnings of the experiment, the evil in the creature may have never surfaced. Throughout the novel, Frankenstein, the theme of life and death is pervasive in connection to the moral ignorance of Victor and his monster. Evidently both characters showed a great quantity of wrongdoing; however the awaiting actions are all start from one: the creation of life from science. This was thought of as an impossible task, but would prove to be Frankensteins foremost dream and goal for his youth and adolescence. Not realizing the severity of the consequences; Victor succeeded in breeding his creature, which would ironically lead to his future destruction. Being unaware to what a creature might do without the proper nourishment from family or friends, Dr. Frankenstein shunned his own creation even though he had the obligation as a parent to foster his child. However, not only did Victor overlook the proper care for his creation, but he also cursed and criticized the appearance of the wretched monster. Frankenstein assembled the beast to look inhuman and rejected what he purposely created. The grotesque look of his child not only repelled his master, but also disgusted the rest of society. Although Victor did not physically commit murder, his denial as a father to his imperfect being was in fact killing the monster from the start. mention the part when F sees monster for the first time It is now obvious that Victor was the most morally irresponsible. He tried to forget his past, as he did not want to be linked with that daemon which was created by his own hands. Frankenstein exhibited selfishness along with small-mindedness. He first ignored his family upon creating his child and then ignored his child upon escaping his workplace. Victor did not think twice and failed to resolve the problem before it augmented. Just a baby being brought into a new and evidently prejudice world, his creation did not know what to do. The monster had to survive in the dangerous world alone with no one to love or give love in return. He had no one to help him, no one to teach him, no one to feed him, no one to even talk to him. Whenever he helped humans, he would always receive harm. He harmed mankind because they harmed him first. Unquestionably, if he were treated with love, he would return the love tenfold. However, Frankenstein was responsible for the miss-education of the child and for the actions of the child. Moreover, Frankenstein was responsible for the deaths of his friends and family. Being the cause of his own unfortunate destiny, Dr. Victor Frankenstein is clearly the one who demonstrated the least moral responsibility. Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Mary Shelley section.

Current market situation of Tesco

Current market situation of Tesco Tesco Plc is the UKs largest retailer and the 4th in the world (after Wal-Mart, Carrefour and Metro AG). Tesco was established in 1919 by Jack Cohen. The Tesco brand first appeared in 1924. Then the first Tesco store was opened in 1929 in Burnt Oak, Edgware, London. Tescos businesses operate in the Europe, the USA and Asia with over 470,000 employees. In 2010 their revenue was in excess of  £56,910 million which was an increase of 5.6% over 2009. The operating profit of the company in 2010 was  £3,457 million which was grown 9.1% comparing to 2009. The net profit was rose by 9.3% over 2009 with  £2,336 million and  £2,138 million respectively. With approximately 4,800 stores in 14 countries around the world, its products and services include: Store types: Extra, Superstore, Metro, Express, Homeplus, Tesco.com Store offerings: Food Retail, Non-Food Retail, Petrol Stations, Home Living Range Tesco Personal Finance: (Tesco Bank) Life Insurance, Pet Insurance, Home Insurance, Travel Insurance, Motor Insurance, Credit cards, Savings Accounts, Personal Loans, Secure Investment Bonds, Online Mortgage Finder Tesco Telecom: Dial up internet access, Broadband, Tesco mobile value SIM, Tesco mobile network, Mobile phones 2/ With about 24% revenue of the total, non-food is a business generates the most revenue of Tesco. In 2010, group non-food sales rose 6.2% to  £13.1 billion with  £9.0 billion in the UK and  £4.1 billion in International. The non food retailing was created with the multi arrangements and they focus on price strategy that low cost structure together with improved merchandising skills. Teesport as an example that help them get better, simpler and cheaper. Moreover, a non-food performance is significantly very strong in the UK with steadily improving like-for-like sales during the year to add another leg to growth. Although the downturn, non-food performance has been definitely resilient and contributed to bring Tesco becomes one of the top retailers in the world. 3/ UK is one of the most important key strategies of Tesco. UK has delivered a good performance in a challenging market achieving a 4.2% increase in sales with profits rising 6.7% to  £2.4 billion in 2010. They focus on helping customers spend less time and price with new products and high quality services to earn customers faithful. Clubcard is example for thank you to their customers. Customers earned  £550 million in voucher from Clubcard. However, they have faced a number of impediments of the UK retail market. In addition, according to the Competition Commissions report that it is actually not easy for a competitor to challenge its scale. Therefore, Tesco still remains the top position of domestic market. 4/ Tescos international business is growing steadily and they are non-stop trying to expand its business to over the world. Although there is a challenging global economic environment and the start-up losses in US business, Tesco significantly keeps a symbol for a gigantic development today when their international business generates 22% with 16% of the Retailing Services markets of profits and  £19.4 billion of group sales in 2010. Increasingly, Tesco draws on their skill and capabilities to utilize their international sourcing such as FF clothing now in ten countries, Discount Brands now in seven markets, Clubcard was introduced in seven countries with more Clubcard holders internationally than in the UK. They will also open 8.5 million square feet in addition in 2011. Tescos strategy is working we have grown sales, profits and market shares and we have continued to invest in the drivers of future growth. Moreover, beside Europe and US, Asia is definitely a potential market when they increase 23.9% of profits with  £9,072 million of sales in 2010. Tesco has continued regional strength and grown well although the economics have been on crisis. 5/ In 2007, Tesco became the UKs largest non-food retailer and the similar trends are occurring in Europe. Additionally, Tesco took part in a joint venture with O2 to found the Tesco Mobile mobile virtual network operator by 2007. One year later, they were the number one mobile network in UK customer service. Furthermore, in 2008, Tesco combined in a joint venture with the Royal Bank of Scotland with 50% share holding and their revenue was  £49,522 million on this year although the economic downturn. Q2. 1/ Corporate social responsibility (CSR) is one of the most important parts of company to take the interests of all stakeholders through their decision-making processes which is balanced with shareholders benefits. Tescos opinion is that CRS is not a specialist function in Tesco, it is a part of everybodys job every day. They use Steering Wheel a balanced scorecard of the key elements of their business to create the new Community Promises: Actively supporting local communities Buying and selling our products responsibly Caring for the environment Giving customers healthy choices Creating good jobs and careers Particularly, the Community Plans are used for all markets and help them change the way they do business, for example by reducing our carbon emissions. Through Customer Question Times (CQTs), meetings and surveys, Tesco talks to customers and other stakeholders in each region to identify local priorities. Moreover, throughout the year 2010, Tesco gave over  £60 million in donations to charities and contributions to community projects including cause-related marketing, gifts-inkind, staff time and management costs. In the other hand, 16,000 jobs were created in Tesco this year including 9,000 in the UK. 2/ Sustainability are not only a project but it is also a way of business and consumers expect it. The Sustainable Consumption Institute (SCI) was established with a  £25 million commitment to the University of Manchester. The SCI aims to perform some subjects about how to make a consumer society sustainable. There are some actions which Tesco have done to respond to the challenge of sustainability as: Sustainable products (Biofuels, Palm oil, Genetically modified (GM) foods, Timber): help customers reduce their carbon footprint and decrease their use of fossil fuels, reduce the chances of deforestation and controls on CO2 emissionsà ¢Ã¢â€š ¬Ã‚ ¦ Supporting UK farmers (suppliers): The Tesco Sustainable Beef Project launched in 2008 to improve productivity and profitability as well as the tenderness and flavour of beef. The Tesco Sustainable Dairy Group (TSDG) was established in 2008 to provide expertise in cattle health and welfare for farmers. Forum for the Future: Tesco works with leading organizations in business and the public sector to create a sustainable future as the sustainable development charity. 3/ Climate change is continuously the main strategic challenge in CSR of Tesco. Among their endeavour to engage employees overcome climate change, Energy Champions is appeared in the Czech Republic, Hungary, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and the UK. Energy Champions are responsible for reducing energy consumption in stores through engaging staff and implementing energy-saving measures. Tescos climate change programme has three main parts: Leading by example: reducing our own direct carbon footprint Working with our supply chains and partners to reduce emissions more broadly Leading a revolution in green consumption. Extraordinarily, Tesco uses a 50:50 biodiesel mix in their own vehicles; offering Clubcard points for customers to reusing carrier bags, and their customers have took over 400 million fewer free plastic bags by the end of April 2007; putting an aero plane symbol on all air-freighted products because this method of transport results in far higher carbon emissions than any other. 4/ Remarkably, Tesco asked for stakeholders feedback on their quality, material issues, strategy and performance. Particularly, there are some evidences with external stakeholders as follow: Customers: Using Customer Question Time (CQT) to identify customers changing needs and help them listen to customers responses on quality and service. Suppliers: Organizing regular meetings with suppliers, processors, manufacturers and get feedback of them by annual Viewpoint survey. Additionally, Tesco provides training course and capacity building for suppliers in appropriate places. Producer Clubs was launched to share experiences together. Governments and regulators: Planning processes and consultations on new regulations including healthy eating and alcohol. Non-governmental organizations (NGOs): In 2008, Tesco operated many meetings with NGOs to discuss issues including climate change, biofuels, ethical trading and animal welfare. They also provide information as request and take part to research and surveys from NGOs. Q3. 1/ As many large corporations, Tesco have been criticized by others companies, writers and organizations. The major way that Tesco have applied is issue writs for criminal defamation and civil libel. Then, they involved in litigation for claims form personal injury from customers, staff and other commercial matters (for example, against The Guardian newspaper about corporation tax in 2007). In the other hand, Tesco usually faced to opposition by government and local people to their expansion. They must adjust their plan to adapt requirement of them (for example, Tesco open a store in Birmingham in 2007; a No Mill Road Tesco campaign is against Tesco opening a store on Cambridges Mill Road in 2007). In some cases, Tesco must retreat their plans (for example, Tesco build a store in Tonypandy, South Wales in 2008 and a store on Hope Street, Liverpool in 2009). 2/ In the financial year 2008 2009, Tesco like other large companies, they also decreased on the market because of the economics downturn. Unquestioningly, Tesco has an abundant capability in the finance market with reputation brand. However, its non-stop in that, Tesco decided to tie up with the Royal Bank of Scotland (RBS) in 2008 with 50% of share holding. RBS operates in insurance and banking. They have a good market position with  £49,522 million of revenue in 2008. After cooperating with RBS, Tesco launched consumer banking to service customers needs and loyalty. They offered the bank accounts to the customers for saving time. It can be clearly seen that it appears a reciprocal relation on their businesses between retail and banking. Actually, consumer banking is a good way to sustain the facilities of retailing services which support to their major business as well. Through the deal, Tesco entered the financial market and handled the financial crisis impressively with  £5 00 million profit in 2009. Total customers are  £5.5 million with  £1.3 million of Bank Credit card accounts. Basically, that is a strategic decision which helps Tesco not only overcame the difficult period but also continuously grow with the successful efforts. Q4. 1/ In 2010, with 287,669 employees and 2,482 stores, Tesco has a significant growth in the core UK business. Then, the UK still remains as the biggest market of Tesco with  £38,558 million of revenue which is increased 4.2% in 2010. In fact, although two-thirds of the groups shop floor space is now overseas, but two-thirds of group sales and 70% of profits still come from the UK. They offer five types of stores including Metro, Extra, Express, Homeplus and Superstore. In addition, non-food retailing market is continued a goal which Tesco aims. Group non-food sales rose 6.2% to  £13.1 billion with  £9 billion in UK in 2010. It evidences that their business has been very strong through the economics crisis. They focus on improving greater value to get more customers who have been encouraged to try non-food range with some key categories such as electrical, entertainment, toys and clothing. 2/ Core Strength: Tesco is currently ranked the third largest global grocery retailer but the second largest based on profit behind Wal-Mart with approximately 4,810 stores in 14 countries within the Europe, the USA and Asia. In addition, the company occupied 30.7% share of the UK grocery retail market in 2010. One of the strategic capabilities of Tesco is a strong financial performance. In 2010, their revenue rose to 5.6% with around  £56,910 million comparing to 2009. The products and services are provided in accordance with the market demands is the first strategy of them. Taking full advantage of development and usefulness of internet over the world, online non-food retail (Tesco Direct) business has significantly matured over 50% through 2009. Tesco provides Clubcard to give customers greater reward for their loyalty to increase investment. Today Tesco has 15 million active Clubcard holders over seven countries in the world. 3/ Undoubtedly, Tesco is actually a leader on innovation to achieve the high profit and position on business. Innovative products and services is becoming a major competitive advantage in the retailing industry today. Therefore, Tesco focuses on better value of services and products than concentrate on pricing alone. Additionally, the companys aim is improving customers shopping experience as easy as possible (many types of stores). Furthermore, Tescos innovation success is ability to control margin well. There are many kinds of goods with low price or sometime an amazing price. Clubcard is also a great success of Tescos innovation. It attracts consumers and influences the behavior of secondary customers to bring them into the fold. Q5. 1/ Tescos vision is to strive and achieve the highest standards, to ensure the long-term access to quality produce and maintain their position as the UKs number 1 of supermarket. Their core purpose is To create value for customers to earn their lifetime loyalty through their values are No-one tries harder for customers by Understand customers; Be first to meet their needs; Act responsibly for our communities and they Treat people as we like to be treated. It can be clearly seen that the way they treat their customers, staffs and suppliers in a culture of Trust and respect each other would help them to raise not only their profits but also their Cooperate Social Responsibilities in where their businesses operate. 2/ Tescos mission statement is to retain loyal customers. That means they want people shop at Tesco frequently and permanently. To achieve the statement, they must set themselves aims. Tesco aims are to maintain customers with excellent values for their money and the top customer service. Customers can enjoy different experiences through many kinds of ranges such as goods and services and many types of stores including luxurious stores. In the other hand, they offer low prices to attract more customers. Furthermore, Tesco also keep their customers loyal to them by providing Clubcard to encourage customers shopping with them to get extra points and special voucher. In fact that Tesco revenue is continuously increased annual. Additionally, Tesco defined their mission clearly with what is the main segment they focus on. Therefore, Tesco significantly have a right strategy and action to support their mission. 3/ Tescos objectives are: To be a successful international retailer To grow the core UK business To be as strong in non-food as in food To develop retailing services such as Tesco Personal Finance, Telecoms and Tesco.com To put community at the heart of what we do Tesco comprehends what they pay attention and their capacities. Undoubtedly, profit is always the first concern of all companies and their shareholders. They expand their sales and profit by focusing on the UK business, non-food and retailing services as well as maintaining their position as the number one retail company in the UK and the top retail company in the world. Accomplishing these targets mean that Tesco surpasses their competitors and preserves the market leader. Moreover, providing goods and services that is cheap and affordable to consumers or the public as a strategy will also support Tescos objectives. Tesco demonstrates that they are trying to achieve their goals totally with successful efforts during past time. 4/ People are entirely a key strategy that every company has to focus on. To motivate staffs Tesco offers a competitive salary, an opportunity to develop a long-term varied career with quality training and especially many good benefits. Basically, all employees have healthcare cash plan and a chance to join pension scheme from the day they start. Some managers and senior managers will be provided private medical insurance. Others policies are standard 20 days for holiday, then 25 days for five year service at Tesco. A lot of staffs work in part-time, thus they are also offered emergency leave, career breaks, shift swaps and flexible hours. Additionally, Tesco built affordable housing to offer for its employees in London. Moreover, staffs are encouraged to involve in the financial performance of the company through a variety of schemes, principally the Tesco employee profit-sharing scheme (Shares in Success), the savings related share option scheme (Save As You Earn) and the partnersh ip share plan (Buy As You Earn). Remarkably,  £175 million payout was shared for all staffs through Save As You Earn (Sharesave) scheme with high appreciates of employees. Above all others, Tesco give a strategy to make its staffs understand and want to contribute their best to the companys development through the companys values.

Latino Actors and Resistance Cinema :: Movies Films

Latino Actors and Resistance Cinema During the second half of the twentieth century Latino actors began to resist the previously portrayed stereotypes in American films. "The beginning of this "coming to self"†¦was the desire to expose the terrible conditions under which Puerto Ricans of this generation had been raised; challenge the assumptions under which these conditions thrived; and re-create the institutions and society that had engendered them" (Jimenez, 188). For many years Latinos allowed themselves to be depicted under various stereotypes which they therefore represented in real life to audiences everywhere. By mid-century, Chicanos, Cubans, and Puerto Ricans began to form ways to deviate from the conventions of earlier American cinema. Documentaries were one creation that offset the false stereotypes put forth by many American filmmakers because they identified with the realism and actuality of Latino life. According to Cine-Aztlan, "in a class society, only those who control have the power to interpret the situation of the masses. That is why capitalist documentaries will never trace the source of the problem and the injustices that the world masses experience under a system of exploitation and human oppression (Cine-Aztlan, 278). When Latinos actually took the step towards self-representation and began producing and directing films and documentaries themselves, the truth started seeping through the lines. In "La Operacion", we see how the Puerto Rican government dealt with the issue of population control. The situation is portrayed realistically and the harsh truth is presented by real people who have real stories to share. This type of cinematography is directly political form of filmmaking that is more likely t o stir emotion in the audience. Luis Valdez could be labeled the originator of the resistance movement, stirring much emotion and discussion with his films. Notably, he directed Zoot Suit, a film portraying a young Chicano who must go through great difficulty to clear his name of a murder he did not commit. Joseph Vasquez directed Hangin' With the Homeboys, a movie directly addressing the stereotypes of minorities through comedy and exaggerated characteristics.

Common Problems and Coping Strategies of Working Students of Usls

CHAPTER 1 Introduction Life is nothing but full of unpredictable endeavours; some who are blessed may not stay as wealthy while some have none are not permanently subjected to nothing. People make their own destiny with the decisions they make, their life progresses with the discipline they uphold and wisdom they strive to incur but most of all with the faith they live out for the rest of their lives. Take for example some of the famous actors such as Isco Moreno, Erap Estrada, Lito Lapid and etc. they are those who are born marginalized but with such effort they have achieved their goals and have become some of the few influential people in the country. In the University of St. La Salle, it is not unknown to us that the school extended its overwhelming presence to reach out to those who are in need and eager enough to finish one’s education. Some of the services that the school is offering are: categorized tuition, academic scholarship, and working student assistance scholars hip.These programs have touched, transformed, and helped a lot of students for the duration of their college lives. Miss Praulaine Kay Beatingo Garcia, 20 years old, is a graduate of Commerce of Hospitality Management in the said University. Miss Garcia is the eldest in the family, and because of some difficulties she enrolled herself and offered her services as a working student in the HSC – AVRC of the University of St. La Salle for 5 years. Endowed with such qualities and knowledge she graduated March 2013 as a Magna Cum Laude.Moreover, others such as, Cheryl Canja, Regine Agapin, Anne Genevieve Navales, Kevin Clyde Ong, Dick Ruselle Hofilena, are some of the few whom enjoyed the privileges of being a full time scholar under the working student assistant program. Being a working student is not a joke, there are many problems that a student may undergo in terms of his/her work, time management, school activities, school requirement, and etc. because of the presence of these problems the students uses several coping strategies for him/her to be able to surpass the demands of his/her environments.Thus, the study aims to find out the most common problems and what are the coping strategies of working students of the University of St. La Salle. Statement of the Problem Scope and Limitation The study primarily focuses on determining the common problems and coping strategies of working students enrolled for Summer 2013 of the University of St. La Salle, Bacolod City. The availability of time plus the loads of other tasks and responsibilities carried by the students were among the restrictions covered in this study.Also, given that a survey will be performed, the participants might not take it seriously and for this reason, will have minimal effect on the accuracy of the results. Significance of the Study Working Students. The study may provide the working students a level of understanding on the problems that other working students encounter and the coping s trategies that they utilize. A feeling of acceptance and common bond with others who are going through the same difficulties may be established with the working students and learning from others’ experiences.Teachers. Familiarity of the study would benefit the teachers through having an adequate knowledge of what they can do to facilitate the needs of working students. They could as well integrate classroom-based activities that could help in coping up the difficulties of these students. School. The school can moreover benefit from this study in a way the administrators may progress school programs. The school could propose new programs that would be able to attend to the needs of these students particularly assisting them with the common problems they encounter.Through this study, the school could as a matter of fact implement programs geared towards the improvement and enhancement of working students Others. The coping strategies discussed in this study may influence and he lp others, not only working students, deal with problems that they encounter in school, at home or anywhere else in their lives. Definition of Terms Working Students. Coping Strategies. Problems. Frequency. Extent.

WorldCom Accounting Failure

This research paper will seeks to discuss accounting failure at WorldCom by trying to understand the nature of fraud committed, the perpetrators who caused the failure, the lacking controls that may have caused all these problems and the intentions of the perpetrators as would be revealed by the extent and frequency of manipulation done in the financial reports of the company. This paper hopes to find the lesson of the story for the guidance of people who may be involved the same way or the other. . Analysis and Discussion 2. 1 Brief background of the company. WorldCom was part the Telecommunication Company before its name it was eventually named to MCI in 2003, Inc after several events including its merger with LDDS and later with MCI Communications as part of its strategy to get out from bankruptcy caused by the scandals that the company went through. MCI, Inc was purchased by Verizon Communication and now part of Verizon Division. What happened at WorldCom, what caused them to commit fraud? WorldCom’s stocks were used as means to enrich its chief executive officer (CEO) Ebbers and other officers basically from finance and accounting departments at the expensed of many investors by making the company’s to look more profitable than what is real. The fake profitability has caused the price of the company’s stock to rise significantly but only to be used by certain people to take advantage with malice against the investors. As to what caused them to commit fraud may be clearly blamed on the apparent greed of these people for more wealth with of the involvement of many of officers or from another point of view, by the laxity of the system of control that allowed things to happen so easily. As to which is more believable would be subject to analysis in the following sections and subsections. 2. 1. b. What kind of fraudulent accounting practices were used to manage earnings, describe the specifics of how it was accomplished? The two fraudulent practices could be classified into two. The first one the underreporting of â€Å"line costs† by capitalizing them rather than recording as expenses for the period and the second one is inflating or overstating the revenues. In accounting profitability is measured by the excess of revenues over expenses every period. The company in effect deferred the recognition of the expenses so that company appeared more profitable that what is real when expenses are recognized properly. The other fraudulent practice is therefore logical and would have the same effect as the first since inflating or increasing the revenues would cause to the company’s profitability to look better. Each of the fraudulent practice is described in detail below. The overall objective of efforts was to keep reported line costs to approximately 42% of revenues which is far from having actually reached levels in excess of 50%, and to maintain in its report to investors double-digit revenue growth when the truth is that actual growth rates were so much lower substantially. People became rich because of the frauds including the company’s CEO Bernard as derived from the increasing price of his shareholdings with the company. The start of the fraudulent accounting was found to be 1999 when the company wanted to paint a good financial condition contrary to what the company was actually in after the downturn in the telecommunication industry shortly after WorldCom has acquired MCI in 1998. By painting a different picture investors were plainly deceived into investing. 2. 1. b. 1) Underreporting ‘line costs’ (interconnection expenses with other telecommunication companies) by capitalizing these costs on the balance sheet rather than properly expensing them The first fraud committed is the reduction of reported line costs, which represents the company largest category of expenses. It is a good thing its internal audit personnel were the ones which alerted about improperly transfer of $3. 852 billion from line cost expenses to capitalized a ccounts during 2001 and the first quarter of 2002. It was latter announced by company about the additional line cost accounting fraud which when combined with the first $ 3. 8 billion would total at $6. 412 billion in improper reductions to line costs. These and other manipulations of line cost caused fraudulent jumping up of pre-tax income by over $7 billion. The fraud actually started as line cost adjustments in the form of accruals in 1999 and 2000 but when it was not possible to make more large accruals, the next scheme as to capitalized or defer 2001 and 2003 operating line cost as assets . Capitalizing will cause the assets to be bigger than actual and would also make the financial structure of the company which would make it attractive to investors while improving its profitability position because of understatement of expenses that would bloat the income. Line costs could be defined charges for carrying a voice call or data transmission from one point to anther point which represents the company’s largest single expense from 1999 to 2001. Being the largest, it was in reality approximately more than 50% of total expenses. This was taken particular focus by company management and other parties particularly outside analysts to find out the trends by the use of ratio of line cost expense to revenue (E/R ratio) as a way to measure the trend of behaviour of the cost to revenues . The company’s manipulation in accrual could be found in releasing the same with the required analysis even it was in excess of the amount required. Even in case of excess accruals, the company did not cause them to be effected at the time of identification. What happened rather was for certain line cost accruals to have been kept as rainy day funds and managers caused only their release when needed. It appears that everything was really in the control of the perpetrators which included key accounting and finance officers since the accounting information was almost being manipulated to serve their selfish purpose as when there is a felt need to improve results. There could only be malice for this kind of behavior since accounting information as supposed to be reported because standards require them to be such. Another manipulation in the accrual as found by investigators was the release of accruals that are applicable for other purposes thus further again understating the expenses to attain the targeted level of profitability as promised to the investors by the manipulators. The inappropriate releases of had commonality in features since they appear directed Chief Finance Officer Sullivan, Controller Myers, and Accounting Yates who are incidentally part of the finance organization in the company. Another is the fact that released occurred not during ordinary or normal day to day operations but during adjustment periods after the end of each quarter and documentation are lacking and employees involved have raised concerns at time because they knew what was indeed happening to the company. The company has fundamentally worn out available accruals at the most possible means to address the needed manipulation of line costs as reported in its financial report by the end of 2000, The following quarter of 2001 and one year after in 2002, the reduction was reached $3. 8 billion from the capitalized $3. billion as directed by its Chief finance officer. It was a clear violation of company’s capitalization policy and the generally accepted accounting standards. Sullivan when asked about the violation commented that there is the plan to ultimately reduce these apparently bloated assets accounts with a hefty restructuring charge to be effected in 2002. The practice of capitalizing operating expense would produce the effect of shifting these costs to balance sheet from income statement and the effect was to bloat income and assets at the same time. Without the capitalization, there would have been losses instead of pre-tax gain as reported. Capitalization by reduction of line cost allowed the company to have E/R ratio of about 42% in every quarter while in reality the company has exceeded 50% E/R ratio. The message that it was bringing to the stock market was that the company’s have been able to sustain profitability despite the problem in the telecommunication industry. A capitalization strategy is in fact part of the internal control but was twisted by manipulators to serve their ends, and for this reason Chief Finance Officer Sullivan needed consent from a number of people from financial and accounting departments of WorldCom. The company had its General Accounting group that is based in Clinton, Mississippi, which made actual journal entries, but the system of the company allows the creation of a swell effect from the books by adjusting databases and reports from several finance-related groups. These groups include Property Accounting group which had its base from Texas which and which as tasked to tracked company’s capital assets. Due to non-passing through the ordinary capital expenditure process, the group was called to effect the capitalizations physically in its database and on its reports. Another group from Texas, called capital reporting group had also participated responsible since it was tasked to approve capital expenditures and to track the same capital spending. It was normal to have the employees within the General Accounting group since the problems on manipulation are basically done by journal entries and their adjustments that these people became concerned about the propriety of the practice causing them to express concern to each others and some even talked of looking for outside that given the risks that they were exposed to. Fortunately, something happened and the tilt of what is good eventually came to the rescue when the Internal Audit discovered the capitalization sometime in June 2002. 2. 1. b. (2) Inflating revenues with bogus accounting entries from ‘corporate unallocated revenue accounts’). WorldCom painted itself in the market as high-growth Company, and how its revenues is going to grow is a thing that should speak for a successful company. Company’s main business is to provide goods and service which are measurable by revenues. Since revenues increase was clearly critical factor of its success, WorldCom was able to convince investors what the company was above water even if market conditions throughout the telecommunications industry were not that good in 2000 and 2001. Since investors would like to make money, it would it was very easy to dupe them into believing that the company could sustain growth. Claiming to have successfully managed industry trends which on contrary were already hurting all of its competitors, the company was wonderfully deceiving people with the promises of double-digit growth rates. It would be asserted in addition to what was stated earlier, the higher the revenues, the higher also would be the profitability if all other things like the expenses are assumed equal. But the company has already bloated revenues and deliberated understated the expenses, so that the growth in profitability was indeed tremendous to attract people to invest in the company’s stocks. The manipulators behind the schemes were therefore focus on revenue enhancement. Ebbers was found by investigators intensely to have put much efforts on revenue performance, by his receiving and closely examining revenue reports which are given to him on a monthly basis by the company’s Reporting and Accounting Group. It was starting in 1999 that the company people made efforts to bloat revenues after the end of every reporting quarter to show to users of information that it was achieving high revenue growth targets that CEO Ebbers and Chief Finance Officer Sullivan had made or wanted to happen. The bloating of revenues was basically done by making adjustments between the differences of actual and â€Å"targeted revenues† and level the same as corporate unallocated revenue accounts. In simple means the company’ management announced a target in revenues to be attained and such must be attained and presented when reporting period comes that the same will require adjusting entries and level the same as unallocated. According to investigators, the questionable revenue entries found under the Corporate Unallocated accounts reached millions or tens of millions of dollars which appeared generally only in the quarter-ending month which were recorded weeks after the quarter has ended. Between Ebbers and Sullivan, it was the second one who became concerned since revenues recorded were already masking the result of the company’s operation. 2. 1. c. Who in the company perpetrated the fraud? Discuss also the fact that the corporations CEO, Bernard Ebbers, took millions of dollars in personal loans from the corporation’s funds. Very briefly discuss the outcome of the fraud and the whole WorldCom scandal, how it was discovered, what happened to the perpetrators. Ebbers persuaded the company’s board of directors to provide him loans amounting to over than $400 millions to cover his margin calls that he failed and was ousted as CEO in April 2002 by John Sidgmore. He and other perpetrators were eventually prosecuted and convicted of crimes in relation to corporate scandals. It was discovered by the internal audit group an announcement was made for the hefty understatement of line cost in the amount of more than $3 billion. This kind of fraud in additions other understatement of lines cost by capitalization and inflation of revenues caused their perpetrators caused their freedom and they are now serving the prison sentences. The fraud was the on the damaged caused to investors who lost their money because of the fake profitability and financial condition of the business. 2. 2) Discuss in detail what controls/ internal controls were missing and/or subverted in order for this fraud/accounting failure to occur. The needed controls/internal controls that were missing and/or subverted in order for this fraud/accounting failure to occur is the independence of the auditors and integrity of the officers of the corporation. The need for independent auditors to ensure reliability of the financial statements is paramount since management not independent in many instances of their engagements and the most probable thing to happen is for management to make self-serving representation in the preparation of financial statements. The practice of accounting profession where the independent auditors will have to attest to the reliability of the financial statements requires the auditor must indeed be independent, competent and with integrity. Lacking one of these requirements would really make a big difference. It appears that the auditor of WorldCom was Arthur Andersen which had involvement with Enron which also collapsed and Waste Management Company. In fact the Security and Exchange Commission had Mr Arthur Anderson convicted at lower court but said conviction was overturned by the Supreme Court sometime in May of 2005. Although he was acquitted of the charge eventually, the fact that he was already charge and convicted is a question of character which do not have a place in the accounting profession. The role of auditors between their client and the public is one vested with public interest so that auditors must have good moral character. Since the auditor should be independent the engagement must be purely auditing or attestation service. It was possible that Andersen was maintaining secretly a special relationship with the management of WorldCom thus Ebbers and company was courageous enough to do the fraudulent act as the very nose of the regulators and the investing public. Dependable information is essential to the very existence of our society. The investor making a decision to buy or sell securities, the banker deciding whether to approve a loan, the government is obtaining revenue based on income tax returns, all are relying upon information provided by others. In many of these situations, the goals of the providers of information run directly counter to those of the users of the information. The purpose of having an auditor is for attestation function or to provide assurance as to reliability of the financial statements. Arguing to have the external auditors to protect the company assets from fraud would be sounding too simple since more than the auditors the stockholders or owners of the corporation must have also the protective or preventive attitude. In addition therefore for the need to have independent, honest and competent external auditors, the company must have also the same independent and honest officers, particularly those who are members of the audit committee and those performing money related functions. The function of company officers are part of a good internal control that any normal or good company must have so that functions would be defined and duties would be segregated or separated in such way that would provide checks and balances. This system of checks and balances are part therefore of good internal control that a company must put into effect. A good internal control must also ensuring compliance with the GAAP is by having since the two are complementary. The GAAP is an external requirement to provide the needed characteristic of information to be reliable for decision making. It is faulty to argue that a company has an efficient and effective internal control over financial reporting if it not consistent with the requirements of GAAP. The underreporting of expenses and inflating of revenues are clear violations of the GAAP since GAAP works for fair presentation of financial statement which are governed by revenue recognition principles and expense recognition principles. Under the revenue recognition principles, revenues must be properly recognized when earned. The practice of inflating revenues by adjusting entries in creating corporate unallocated revenue accounts could easily be detected if there is an effort to do so since the name of unallocated accounts is very revealing but since the perpetrators are from the very people who are to ensure the reliability of the financial statements, the standard appeared to have no power over their criminal minds. But as found in the investigation, it was the internal audit which first calls for the alarm when there was a transfer of line costs amounting to more than $ 3 billion. This means that the system of internal control of the company still allows the working of revenue recognition principle to be noticed since they found that the ratio of expenses to revenue was already too low despite the transfer of big amount of expenses to assets. The revenue recognition principle could have guided them the simple minds of auditor that it was utterly impossible to have produced those ratios. To go back to internal control, it is management’s responsibility to have it in place but the people who were governed by the procedures did not all work together to protect the company assets since some are just evil while others are perhaps touched by their conscience especially the internal audit personnel who called the alarm on the transfer of more $3 billion line costs to assets. It appears that internal control must also have the characteristic of integrity as a system since if others are honest but others are dishonest, it will still malfunction because the company appeared to have two sets of values. Every practicing accountant and auditors will agree that the purpose of the internal control is to provide assurance that its financial statements are reliable and its preparation are in accordance with the accounting standards as issued by Financial Accounting Standards Board (FASB). Since internal control policies and procedures for the maintenance of record in reasonable detail and reflecting the same in accurate and fair manner, first and foremost, the objective must be desired by management as a goal. In the case of WorldCom it is believable to assert that the company did have internal control but its implementation was clouded by the intention of the few who wanted to enrich themselves at the expense of investors. If the company has indeed proper values that are adopted and desired by its members, the company could have surmounted the internal control’s inherent limitations for its not to have prevented or detected the misstatement of revenues and expenses. 2. 3 Discuss in detail what a forensic accounting consultant (you) would have recommended or instilled to have prevented this fraud/accounting failure. pages As a forensic accounting consultant, what was needed was independence of the auditor from management. Auditors are to maintain their independence from the client as called for by their ethical standards but the moment that there is connivance, it goes pretty sure that fraud could easily happen. The work of an external auditor is separate from that of the company ac countant or even an internal auditor. Companies must reliable financial reporting system so that information should accurate and in accordance with generally accepted accounting principles (GAAP). One way of ensuring compliance with the GAAP is by having an efficient and effective internal control over financial reporting. Since it is management’s responsibility to do the same, the company must do the same with a sense of integrity as part of its defining values. . Since the purpose of the internal control is to provide assurance that its financial statements are reliable and its preparation are in accordance with the US GAAP must be become a necessity for the company to make it good. Internal control is policies and procedures for the maintenance of record in reasonable detail of information and should the reflection of the same in accurate and fair manner. This set of policies and procedure would provide assurance at reasonable level so that unauthorized acquisition or disposition of company’s asset that could materially affect financial statements are detected timely and prevented accordingly. Every company’s internal control has its own inherent limitations that may not prevent or detect the misstatement that must be watched. It is thus accepted by experts in accounting that projections of any effective evaluation to future periods could still have risk thus making the controls inadequate to respond to the needs for more reliable financial statements because of changing conditions as a necessary part of business and degree of compliance with establish procedures may decline as well. It is for this reason that the managements desiring to have the internal in effect must conduct its own evaluation of its existing internal control on its financial reporting. It cans use as framework the Internal Control – Integrated Framework as issued by the Committee of Organizations of the Treadway Commission (COSO). 3. Conclusion The story of WorldCom is a story of how greed would cause damage to people and how the accounting profession could be used as an instrument to perpetrate fraud. Theoretically, accounting is considered as the language of business and that it should provide information to help users for decision making. The basic requirement of valid accounting information is that it must be accurate or truthful. This characteristic was absent in the case of WorldCom as the accounting information was twisted to serve the interest of few people. No wonder Ebbers and company have to go to jail to suffer for the accounting fraud they have committed against the investors and for other crimes which are connected to the act of fraud. The analysis revealed to have to good internal control as requirement for providing reasonable assurance of providing information that is reliable for decision making. Said purpose must be consistent in the company’s being subjecting itself to compliance with US GAAP for the preparation of its financial statements that are reliable. The company must put and serious stand on this since the standards are meant to reconcile conflicting interest of users to prevent one user from taking advantage at the expense of the other. The set of policies and procedures from the efficient and effective internal control would provide reasonable that unauthorized acquisition or disposition of company’s assets that could materially affect financial statements are detected one time and preventive efforts could be applied accordingly. In the final analysis however, between the good internal control and the people who would implement, more weight should be given in the need for integrity and honesty of people who will implement the internal control. The maker should control what it has made. By the same principle the good internal control will mean nothing if people do not have integrity and are only seeking their selfish interest at the expense of all other stakeholders. There is no cure for greed there is a way to discourage or minimize the same by threat of strict implementation of the law. The case of Anderson who became an auditor of WorldCom appears to have not resulted to his prosecution of any crime but the auditor’ case with Enron was different. However he got himself acquitted in the higher court. Government therefore has also a role to play. It has imprisoned the perpetrators of WorldCom hence it should be a warning for many who plans to cheat investors.