logging in or signing up Livent Memon Asif v3 lhomme39 Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINTLite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 355 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: November 21, 2009 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... By: mbago (28 month(s) ago) Very nice presentation. I have to pick btn this case and 3 other cases for my auditing class. Did you have to answer the questions at the end of the case? Saving..... Post Reply Close Saving..... Edit Comment Close By: lhomme39 (30 month(s) ago) This is my school project and I may share it with you once it is graded. Can you suggest why you are interested in the original PPT presentation? Saving..... Post Reply Close Saving..... Edit Comment Close Premium member Presentation Transcript Lessons to learn from the case:Courage & Objectivity in Professional Accounting : Lessons to learn from the case:Courage & Objectivity in Professional Accounting Livent – When Maria….When? Background on Livent : Background on Livent Livent was in the business of premier live entertainment & theatre productions. In 1998 it was sold to investment group, who reported. “massive, systematic, accounting irregularities that permeated the company.” Maria joins Livent in May of 1996 and starts scrutinizing the numbers. Upon discovery of fraud, got panicked but starting pursuing her superiors taking baby steps at a time. Main Characters of Livent : Main Characters of Livent Characters’ Personalities & Actions : Characters’ Personalities & Actions Drabinsky: Frighteningly Intimidating Heavily involved in financial misrepresentations Fails consequentialism, deontological, and virtue ethics tests. Gordon: Callous believes in earning smoothing Maria Competent, professional, demonstrates integrity Lacks courage (is intimidated by Drabinsky) According to testimony by Webster on Drabinsky abusive management style, “[Maria] shaking like a leaf” Timeline of Important Events : Timeline of Important Events Timeline of Important Events : Timeline of Important Events How was the fraud conducted? : How was the fraud conducted? Specialized computer software to track Livent’s real and fraudulent numbers Subsequent to manipulations, adjustments replaced real accounting records. No paper trail Source: Livent Case by Michael Knapp, Professor, University of OK Issues: IFAC Code, Section 100.1 : Issues: IFAC Code, Section 100.1 According to IFAC Code, Section 100.1 A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Question: Did Maria follow this code? Answer: No Comment: While it appears that Maria was cognizant of the gross fraud and misrepresentations, she could not protect the interests of the public Issues: Priority of Duty, Loyalty & Trust in Fiduciary : Issues: Priority of Duty, Loyalty & Trust in Fiduciary Maria, as a professional, has entered into a fiduciary relationship with the society and hence: Maria has been given the right to perform fiduciary services using her expertise, and Expertise should be applied together with: Courage, honesty, integrity, objectivity, due care, professional skepticism, competence, confidentiality, and avoidance of misrepresentation. Question: What did Maria really do wrong? Answer: Maria lacked courage and worked with misrepresented numbers for a while. Comments: Maria was professional but could not muster all the strength to defy the fraudulent activities. Ethical Regime - International : Ethical Regime - International Guidance framework includes… IFAC Code of Ethics, CICA Independence Exposure Draft IFAC Code at www.ifac.org/Ethics/ GAAP, GAAS SOX, SEC Rules – released Nov. 19, 2002 www.sec.gov A professional accountant must adhere to a set of rules aimed at neutrality and at protecting the public interest – s/he should not go to absolutely any lengths to serve a specific client’s interests, unless the public interest is also served Ethical Perspective to Maria’s Actions : Ethical Perspective to Maria’s Actions Punishment to Maria – a single mother : Punishment to Maria – a single mother Whistle Blowing & its Consequences : Whistle Blowing & its Consequences Why Maria did not blow the whistle in time? According to her testimony, she was “immobilized by fear” of losing her job and Career consequences of alleging dishonesty on the part of people she considered to be of influence and power. Fact: Neither the law nor any of the accounting professions would tolerate an accountant, at any level in the organization, who fails to report a suspected financial fraud. For many whistleblower, confronting the boss means career suicide Conclusion : Conclusion Maria did not truly face any ethical dilemma during her employment with Livent. She could differentiate right from wrong: Ethically Legally Courage to act in a timely manner is what Maria seems to have missed. She apparently paid a high price for not carrying out her fiduciary duty. References : References http://aaahq.org/audit/midyear/03midyear/papers/livent.html You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
Livent Memon Asif v3 lhomme39 Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINTLite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 355 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: November 21, 2009 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... By: mbago (28 month(s) ago) Very nice presentation. I have to pick btn this case and 3 other cases for my auditing class. Did you have to answer the questions at the end of the case? Saving..... Post Reply Close Saving..... Edit Comment Close By: lhomme39 (30 month(s) ago) This is my school project and I may share it with you once it is graded. Can you suggest why you are interested in the original PPT presentation? Saving..... Post Reply Close Saving..... Edit Comment Close Premium member Presentation Transcript Lessons to learn from the case:Courage & Objectivity in Professional Accounting : Lessons to learn from the case:Courage & Objectivity in Professional Accounting Livent – When Maria….When? Background on Livent : Background on Livent Livent was in the business of premier live entertainment & theatre productions. In 1998 it was sold to investment group, who reported. “massive, systematic, accounting irregularities that permeated the company.” Maria joins Livent in May of 1996 and starts scrutinizing the numbers. Upon discovery of fraud, got panicked but starting pursuing her superiors taking baby steps at a time. Main Characters of Livent : Main Characters of Livent Characters’ Personalities & Actions : Characters’ Personalities & Actions Drabinsky: Frighteningly Intimidating Heavily involved in financial misrepresentations Fails consequentialism, deontological, and virtue ethics tests. Gordon: Callous believes in earning smoothing Maria Competent, professional, demonstrates integrity Lacks courage (is intimidated by Drabinsky) According to testimony by Webster on Drabinsky abusive management style, “[Maria] shaking like a leaf” Timeline of Important Events : Timeline of Important Events Timeline of Important Events : Timeline of Important Events How was the fraud conducted? : How was the fraud conducted? Specialized computer software to track Livent’s real and fraudulent numbers Subsequent to manipulations, adjustments replaced real accounting records. No paper trail Source: Livent Case by Michael Knapp, Professor, University of OK Issues: IFAC Code, Section 100.1 : Issues: IFAC Code, Section 100.1 According to IFAC Code, Section 100.1 A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Question: Did Maria follow this code? Answer: No Comment: While it appears that Maria was cognizant of the gross fraud and misrepresentations, she could not protect the interests of the public Issues: Priority of Duty, Loyalty & Trust in Fiduciary : Issues: Priority of Duty, Loyalty & Trust in Fiduciary Maria, as a professional, has entered into a fiduciary relationship with the society and hence: Maria has been given the right to perform fiduciary services using her expertise, and Expertise should be applied together with: Courage, honesty, integrity, objectivity, due care, professional skepticism, competence, confidentiality, and avoidance of misrepresentation. Question: What did Maria really do wrong? Answer: Maria lacked courage and worked with misrepresented numbers for a while. Comments: Maria was professional but could not muster all the strength to defy the fraudulent activities. Ethical Regime - International : Ethical Regime - International Guidance framework includes… IFAC Code of Ethics, CICA Independence Exposure Draft IFAC Code at www.ifac.org/Ethics/ GAAP, GAAS SOX, SEC Rules – released Nov. 19, 2002 www.sec.gov A professional accountant must adhere to a set of rules aimed at neutrality and at protecting the public interest – s/he should not go to absolutely any lengths to serve a specific client’s interests, unless the public interest is also served Ethical Perspective to Maria’s Actions : Ethical Perspective to Maria’s Actions Punishment to Maria – a single mother : Punishment to Maria – a single mother Whistle Blowing & its Consequences : Whistle Blowing & its Consequences Why Maria did not blow the whistle in time? According to her testimony, she was “immobilized by fear” of losing her job and Career consequences of alleging dishonesty on the part of people she considered to be of influence and power. Fact: Neither the law nor any of the accounting professions would tolerate an accountant, at any level in the organization, who fails to report a suspected financial fraud. For many whistleblower, confronting the boss means career suicide Conclusion : Conclusion Maria did not truly face any ethical dilemma during her employment with Livent. She could differentiate right from wrong: Ethically Legally Courage to act in a timely manner is what Maria seems to have missed. She apparently paid a high price for not carrying out her fiduciary duty. References : References http://aaahq.org/audit/midyear/03midyear/papers/livent.html