Financial reporting and accountability of management.

Accounting debacles, such as the case of Enron, brought to light the necessity of
accuracy in financial reporting and accountability of management.
Pick one company (e.g., Enron, WorldCom, Toshiba, Wells Fargo) to research.
Describe in summary what accounting issue(s) occurred within your chosen
company. Then, look for connection on three or more of the internal control
components and/or principles of internal control activities (the ones we noted
and discussed in Chapter 7) that should/could have been implemented or
performed more appropriately to avoid the accounting issues that were brought
to the public’s attention. Note how they could have done things differently to
avoid the debacle that was created or that they put themselves in. There is no
“one right answer”, but you will be graded on how well you link your thoughts on
this to what we have learned in Chapter 7. Simple, well-organized and justified
thoughts will serve you best!
As a reminder from Chapter 7 – things to look out for in your research… impacts
on the company’s:
Chapter 7 Internal Control Components
– Control Environment
– Risk Assessments
– Control Activities
– Information and Communication
– Monitoring
Chapter 7 Principles of Internal Control Activities
– Establishment of responsibility
– Segregation of duties
– Documentation procedures
– Physical controls
– Independent internal verification
– Human resource controls