The Issue And Existing Business Practices

After reviewing the financial information of the Tech Tennis, USA, there was a concerned due to some unusual changes in the company’s accounts. Financial statements play a crucial part in the determination of the progress of an organization. It assists the relevant personnel to identify whether the company is making profits or making losses. Although unethical, some companies will tend to deliberately misrepresent some of their financial statement information to create a false impression of the company’s success. There are various techniques that organizations utilize to manipulate their financial statements such as overstating their revenues (Bierstaker, Brody, & Pacini, 2006). In addition, some organization will tend to inflate their sales without considering their cash flow amount that the organization has acquired which will be a red flag to investigate. Consequently, financial statements provide vital information that helps both internal and external users to understand the position of the organization. Some companies in an attempt to continue in the market, they end up manipulating their financial statements that create an illusion of the success of the organization.

Falsifying expense reports, including reporting expenses that were not incurred, claiming personal expenses that were not incurred for business reasons, or altering receipts, is considered to be dishonest and will subject the employee to discipline, up to and including termination.

In fraud committed against organizations, the victim of fraud is the employee’s organization. In frauds committed on behalf of an organization, executives usually are involved in some type of financial statement fraud; typically, to make the company’s reported financial results appear better than they actually are. In this second case, the victims are investors in the company’s stock. A third way to classify frauds is via the use of the ACFE’s occupational fraud definition, “the use of one’s occupation for personnel enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (ACFE, 2010). The ACFE includes three major categories of occupational fraud: asset misappropriations involves the theft or misuse of the organization’s assets, corruption involves the wrongful use of influence in a business transaction in order to procure benefits contrary to their duty to their employer, and fraudulent financial statements involving falsification of an organization’s financial statements for personal gain.

This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act fast to prevent the accusations charged upon them, so that they may venture deep into the United States market. In the process, they had to act in a way that will present the company’s financial statements; cash flows in a way that they did not show any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which involves the act of offering the accounts in the way they are not in reality.

Managers have been known to instruct employees to exaggerate and mislead some financial documents to have some office petty cash fatten up their own pockets. Maybe even going out to extravagant dinners at the company’s expense and using it as business write-offs. If caught with some of these practices, charges can be brought up against the employees, as well as, immediate termination.

Asset misappropriation in corporate America is so normal, however this fraud plot isn't new the spate of its event in the most recent decade involves grave worry to administration, speculators and workers. Resource misappropriation plans include workers, ordinarily in conspiracy with a few individuals from administration who contribute in abrogating and covering the plan. Therefore, it goes on for just about 10 years before a watchful individual from administration identifies it. This report surveys a benefit misappropriation fraud executed by Miss Sujata "Sue" Sachdeva, its Chief Financial Officer in the vicinity of 1997 and 2009, assess the elements that added to the misappropriation and decide if any administration omissions or insufficiencies

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

Expense reimbursement schemes, as the name occur when employees make a false claims for reimbursement of fictitious or inflated business expenses.

Within the next decade leadership and organizational strategy will see many changing trends that will affect the way businesses conduct business. Education Management Corporation (EDMC) is the parent company of the Art Institute of California – Sacramento, a for-profit university (Education Management Corporation, 2015). The Sacramento campus is just one out of the thirty-seven campuses spread out throughout the United States and Canada (Art Institute, 2015). This university’s campus opened in 2007 and currently has programs of study in Culinary, Media Arts, Graphic Design, Fashion, Game Art, Web Art and Design and Photography. It currently offers diploma/certificate programs, and Associate and Bachelor degrees, which are accredited by

“Think not of yourself as the architect of your career but as the sculptor. Expect to have to do a lot of hard hammering and chiseling and scraping and polishing,” (B.C. Forbes, n.d). The case study involves an executive Lance Mannion who is offered prestigious position at his father’s firm, but prior to accepting the offer he wants to further develop his personnel management skills. Lance accepts a senior administrative position in overseas tourist firm; he finds considerable success in his new position and assists the organization with lowering their overall expenses. Lance suggests to the management and fellow executives that they could contribute to the cost savings by reducing their expenses, but his met with opposition from his fellow colleagues. Lance decides to investigate the executives expense records and his alarmed by his findings. Lance soon discovers that executives are misusing their expense accounts on personal purchases and some are even using it to conduct an affair. Lance is presented with an ethical dilemma in how to respond to the executives’ misuse of company’s resources.

“Think not of yourself as the architect of your career but as the sculptor. Expect to have to do a lot of hard hammering and chiseling and scraping and polishing,” (B.C. Forbes, n.d). The case study involves an executive Lance Mannion, who is offered a prestigious position at his father’s firm, but prior to accepting this offer he wants to further develop his personnel management skills at another organization. Lance accepts a senior administrative position in an overseas tourist firm; he finds considerable success in his new position and assists the organization with lowering their overall expenses. He suggests to the management and his fellow executives that they could also contribute to the cost savings by reducing their expenses, but is met with opposition from his fellow colleagues. He decides to investigate the other executive’s expense records and is alarmed by his findings. His research has found that the executives are misusing their expense accounts on personal purchases and to finance workplace. Lance is presented with an ethical dilemma in how to respond to the executives’ misuse of the company’s resources.

PESTEL Frame Work: PESTEL framework is a tool used to analyses the external environment of the business in order to understand the big picture in which the organisation operates. Thus, enabling them to take advantage of the opportunities also it minimizes the threat faced by the business activities(Johnson, Whittington et al. 2011) .

Over the past two years, corporate America has endured a plethora of fraudulent acts committed by those of high status within their respective corporations, most of which involve internal fraud. Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former. Misappropriation of assets is defined as fraud for personal gain. It is the most common type of fraud found among employees and frequently includes theft of cash and inventory.

The solution business is yet another traditional time tested business model. Like the freelance model it can be combined with the specialization business, debt business, or the first to market business. In many ways the solution business model can be compared to the freelancer model. Some might even say it is the same.

In the modern age where business is spread globally the challenges in front of an organization are highly complex as the competition intensifies. Due to the complexity in the organizational management the older system methodology seems to become less relevant and sparingly less useful in these situations. These issues led to the introduction of complexity paradigm (Amagoh, 2008). Complexity theory was derived from the chaos and systems theory to show how a system is not confined in its boundaries and the growth or fall of an organization or a system depends upon how it is able to adapt and change to various situations.