Enron was founded in 1985 by Kenneth lay as a natural gas company when the U.S. gas market was in the midst of deregulations. The company took advantage of this deregulation, by offering long term contracts with fixed prices to guarantee gas buyers stable prices for the duration of the contract since one of the side effects of these deregulations was exposing gas buyers to short term volatile gas prices. With this at hand the company grew to be the biggest seller of natural gas in North Ameri...
As a developing country, Indonesia requires sufficient national revenue to support its development process. As the natural resources such as crude oil, copper, tin, gold, silver, and other non renewable resources gradually declines in production, the reliance on other sources of income becomes higher. One prospective source that reflects the autonomy of a nation in financing its development process would be tax income. Data from Indonesian Directorate General of Taxes (DGT) from 2001 until 20...
In this chapter the concept of earnings management will be discussed. Also, the motives for earnings management will be presented, as well as earnings management through pension accounting. This chapter will end with a summary. Earnings management was defined by Schipper (1989) as: " purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain." A more recent definition is from Healy and Wahlen (1999): "Earnings management occurs when man...
There is an increasing need for communications amongst four components of CG; there are board of directors, management, internal audit and external audit. A soundness corporate governance (CG) assist effective, efficient and entrepreneurial management that can deliver shareholder value in the long run (The Financial Reporting Council Limited, 2012). Contribution of Internal Auditing towards Corporate Governance The role of IA of the company, considering the influences of the control of manage...
The Reliance Industries India group (RIL), started by the Late Dhirubhai H. Ambaniin in 1970s as a textile company, is presently Indias largest private sector conglomerate with revenues in excess of USD 44 billion and exports products worth USD 7 billion to more than 100 countries. RIL also features in the 'Fortune Global 500 companies' with an employee base of more than 25,000 professionals across the world. Reliance enjoys a preeminent position in terms of its contribution to the Indian eco...
Budgetary control is part of overall organization control and one of the most important tools used for planning, controlling and co-ordinating organizations. It is a tool to achieve financial control of organization and compare actual result for a defined period of time with the budgeted (flexed) results. Any differences are being investigated and corrective actions are taken to make sure that the actual activities do not deflect from the budgeted. Majority of world's most successful companie...
This report will focus on the role of the audit committee. Recent high profile failures such as Enron, Worldcom certainly brought the spotlight onto the role of the audit committee. This report will examine the role of the Audit Committee over the years and who exactly they are and what they do. Recent current issues that have highlighted areas of weakness with the audit committee shall be assessed and it will also look into finding out what remedies if any there have been to correct them. Me...
Shareholder Value: An Analysis of Current Corporate Reporting Practices. Shareholder value has been attracting considerable interest in recent times. The pursuit of such approach involves moving the focus of attention away from simply looking at short-term profits to a longer-term view of value creation, the motivation being that if implemented correctly, it will help the business to stay ahead in an increasingly competitive business world. This dissertation sought to investigate whether comp...
Cost allocation is an extensively used practice in virtually every organization and in nearly every facet of accounting (Harris K., Curry W.,1997 Cost Accounting Prentice Hall 9th edition). Cost allocation is defined as a method of assigning and reassigning of a cost to one or more cost objectives (Horngren and Foster, 1987). The major reason for adopting this practice is concerned with "best" decision making for managers. These decisions may not necessarily be seen as profit-maximizing (Woul...
The OECD principles represent the first initiative by an inter-governmental organization to develop the core element of a good corporate governance regime. There is no single model of good corporate governance: different approaches have develop around the world .although principles are non- binding, it is the interest of the countries and corporations to assess their cg regimes and take the principles to heart .the principles are part of a broader international efforts to promote increased tr...
