Discuss the importance of the role of a wealth manager professional in the context of protecting the integrity of the financial system and preventing financial crime. (500 words)
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- There are specific regulatory obligations that are imposed on Accountants in relation to detectingand reporting money laundering activities. You have been asked to provide a trainingsessiondraft to new Audit Juniors on Accountants responsibilities to the subject matter. Required: a. Explain the term money laundering and furnish them with critical examples and illustrationsb. Explain the policies and procedures that a Fim of Chartered Accountants could use todemonstrate their responsibilities to detecting or avoiding the incidence of moneylaunderinWhy would a financial institution’s PEP customers be required to provide documentation to evidence their source of wealth and/or income? In other words, what type of fraud would PEP clients more likely be associated with than the non-PEP customers? Why would they need to launder their money?CHAPTER SUMMARY Ethical issues in finance are important because they bear on our financial well-being. Ethical misconduct, whether it be by individuals acting alone or by financial institutions, has the potential to rob people of their life savings. Because so much money is involved in financial dealings, there must be well-developed and effective safeguards in place to ensure personal and organizational ethics. Although the law governs much financial activity, strong emphasis must be placed on the integrity of finance professionals and on ethical leadership in our financial institutions. Some of the principles in finance ethics are common to other aspects of business, especially the duties of fiduciaries and fairness in sales practices and securities markets. However, such activities as insider trading and hostile takeovers raise unique issues that require special consideration. Insider trading is prohibited because it involves trading of information not publicly available or…
- Each of the following scenarios is based on facts in actual fraud. Categorize each scenario as primarily indicating (1) an incentive to commit fraud (2) an opportunity to commit fraud or (3) a rationalization for committing fraud. Also state your reasoning for each scenario. a. There was intense pressure to keep the corporation’s stock from declining further. This pressure came from investors, analysts and the CEO, whose financial well-being was significantly dependent on the corporation’s stock price. b. A group of top-level management was compensated (mostly in the form of stock options) well in excess of what would be considered normal for their positions in the industry. c. Top management of the company closely guards internal financial information, to the extent that even some employees on a “need to know basis” are denied full access. d. Managing specific financial ratios is very important to the company, and both management and analysts are keenly…Each of the following scenarios is based on facts in actual fraud. Categorize each scenario as primarily indicating (1) an incentive to commit fraud (2) an opportunity to commit fraud or (3) a rationalization for committing fraud. Also explain your reasoning for each scenario. a. There was intense pressure to keep the corporation’s stock from declining further. This pressure came from investors, analysts and the CEO, whose financial well-being was significantly dependent on the corporation’s stock price. b. A group of top-level management was compensated (mostly in the form of stock options) well in excess of what would be considered normal for their positions in the industry. c. Top management of the company closely guards internal financial information, to the extent that even some employees on a “need to know basis” are denied full access. d. Managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of variability in…What are the most common approaches that perpetrators use to commit fraudulent financial reporting? You are asked to be interviewed by a student newspaper regarding the nature of accounting fraud. The reporter says, “As I understand it, asset misappropriations are more likely to be found are more likely to be found in small organizations, but not in larger organizations. On the other hand, fraudulent financial reporting is more likely to be found in larger organizations.” How would you respond to the reporter’s observation? The fraud triangle identifies incentives, opportunities, and rationalizations as the three elements associated with most frauds. Describe how each of these elements is necessary for fraud to occur.
- Assume that you are interviewed by a student newspaper regarding the nature of accounting fraud. The reporter says, "As I understand it, asset misappropriations are more likely to be found in small organizations, but not in larger organizations. On the other hand, fraudulent financial reporting is more likely to be found in larger organizations." How would you respond to the reporter's observation?Appraise the motivation of senior management (CEO and/or CFO) to commit financial statement fraud and how they go about to do so? Elaborate.Explain with examples, understanding of the impact of financial crimes on the operations of financial institutions. Assess and comment on effective strategies used by financial institutions to manage/ curb financial crimes. Discuss with examples, financial innovation in banking and finance, explaining the impact of this current trend on financial crimes.
- What was evolutionary about laws such as GLBA and FACTA? What do organizations need to consider to be compliant with GLBA and FACTA? What is the impact of crimes such as identity theft? How do different jurisdictions (federal, state, or international) deal with financial crimes such as identity theft? Site at least one example.Categorize the situation as primarily indicating 1 - an incentive to commit fraud 2 - an opportunity to commit fraud 3- a rationalization for committing fraud state the reasoning behind the category you choose Scenario: A group of top-level management was compensated (mostly in form of stock-options) well in excess of what would be considered normal for their positions in this industryQuestion Each of the following scenarios is based on facts in actual fraud. Categorize each scenario as primarily indicating (1) an incentive to commit fraud (2) an opportunity to commit fraud or (3) a rationalization for committing fraud. Also state your reasoning for each scenario. a. There was intense pressure to keep the corporation’s stock from declining further. This pressure came from investors, analysts and the CEO, whose financial well-being was significantly dependent on the corporation’s stock price. b. A group of top-level management was compensated (mostly in the form of stock options) well in excess of what would be considered normal for their positions in the industry. c. Top management of the company closely guards internal financial information, to the extent that even some employees on a “need to know basis” are denied full access. d. Managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of…
