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CPE session

    James C Gaa
    Ethics Education Boot Camp
    CPE session posted July 26, 2010 by James C Gaa, last edited May 20, 2012 
    3351 Views, 36 Comments
    title:
    Ethics Education Boot Camp
    leader(s), affiliation(s):
    Mohammad AbdolMohammadi
    session description:

    Notes for session on course in "Information, Ethics and Society"

    James Gaa

    date:
    July 31, 2010 3:00pm - 6:30pm

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    • Anton Du Toit

      Hi

      I have posted some interesting material and files on the following post:

      CPE session  Ethics Boot Camp    2 19  Ali Abdolmohammadi

      Kind regards

      Anton du Toit

      Director: Accountancy Studies, Monash South Africa

    • Robert E Jensen

      "Video: Trapped (A Must See!)," by Nadine Sabai, Sleight of Hand Blog, November 29, 2010 ---
      http://sleightfraud.blogspot.com/2010/11/video-trapped-must-see.html

      Summary (Via Cato Institute):

      Trapped: When Acting Ethically Is against the Law featuring John Hasnas, a Professor of Law and Ethics at Georgetown University Business School and with comments by Alice Fisher, Assistant Attorney General in the Criminal Law Division at the Department of Justice.

      Since Enron's collapse in 2002, the federal government has stepped up its campaign against white-collar crime. In "Trapped: When Acting Ethically Is against the Law", John Hasnas compellingly illustrates how the campaign against corporate fraud has gone overboard. Hasnas debunks the common assumption that the law only mandates ethical behavior. That may have been true 20 years ago, but no longer. Hasnas points out that business executives have responsibilities to their stockholders, employees, customers, and suppliers. And in addition to their contractual obligations, CEOs have ordinary ethical obligations as human beings to honor their informal commitments. Those ethical complexities are rarely acknowledged by contemporary federal policies that demand compliance with myriad rules and regulations. The result is increasingly a Catch-22 situation in which businesspeople must act either unethically or illegally.

      Bob Jensen's Fraud Updates are at
      http://www.trinity.edu/rjensen/FraudUpdates.htm

       

    • Robert E Jensen

       

      A New Teaching Module for Ethics Courses:  Channel Checking and Trading

      Question
      When should channel checking (e.g., traders bribing employees of trade channel suppliers and distributors) and channel trading (e.g., trading by Minnie Pearl in a supplier's Accounts Receivable Department in securities or derivative securities of customers)?

      "Who’s Checking Your Channel?" by Bruce Carton, Securities Docket, December 8, 2010 and being passed around various blogs.

      Two months ago I declared September 2010 “Insider Trading Month” for the Securities and Exchange Commission’s sudden burst of enforcement activity on that front. Then came November, and boy, did enforcement go off the charts.

      The extraordinary activity of prosecutors and regulators that month set Wall Street traders abuzz, but compliance officers and other executives at public companies should also take careful notice. And what’s so different about the latest round of insider-trading cases? Investigators are focusing on the flow of supply-chain information. That includes a lot more people than the gossipy traders working in lower Manhattan.

      On November 20, reports circulated that both the Justice Department and the SEC were preparing insider-trading cases against a long list of Wall Street entities: consultants, investment bankers, hedge fund and mutual fund traders, and analysts. According to the Wall Street Journal, the charges would allege “a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies.” Two days later, the FBI raided the offices of three hedge funds as part of the investigation, with more raids expected.

      Portions of the investigation are fairly standard—hedge funds tipped off to pending merger deals, for example; that’s nothing new under the sun. But another wrinkle has equity research analysts on red alert. Regulators are now thought to be probing whether an analyst practice commonly known as “channel checking” constitutes illegal insider trading. If so, the public companies whose information is in play could soon be pulled into the whirlwind.

      One company where channel checks have reportedly now become a widely used and highly relied-upon source of information for traders is Apple.

      In a channel check, analysts try to glean information about a company’s production via interviews with the company’s suppliers, distributors, contract manufacturers, and sometimes even current company employees. The goal is to piece together a better picture of the company’s performance. Apple, always secretive about its products, is an example of a company where channel checking is reportedly common. Indeed, analyst reports based on channel checks routinely cause Apple stock to dip or surge.

      As supply-chain expert Pradheep Sampath of GXS noted on his blog, these interviews typically occur without the target company’s permission or participation. Sampath adds that:

      Data collected from these sources is seemingly innocuous when viewed separately. When pieced together however, these data points from a company’s supply chain can deliver startling insights into revenue and future earnings of a company—much in advance of such information becoming publicly available. This practice becomes more pronounced for companies such as Apple that are extremely guarded and secretive about information they make publicly available.

      Reasons abound to question whether the Justice Department or the SEC will ever decide to bring a channel-checking case. First, the information gleaned from any one individual in the channel is unlikely to be material by itself. For example, the maker of screens for Apple’s iPhones may reveal that sales of those screens to Apple ticked up in December. But given that Apple has so many revenue streams and just as many channels for those streams, this one detail from our screen-maker is not likely to be material by itself.

      Only when that information is pieced together with many other pieces of information to build a “mosaic” does a larger picture emerge that might arguably be material information about the company. This is, in effect, what equity research analysts are paid to do. But as the U.S. Supreme Court stated in the SEC’s ultimately unsuccessful insider-trading case against research analyst Raymond Dirks, analysts play an important role in preserving a healthy market, and imposing “an inhibiting influence” on that role may not be desirable.

      Nonetheless, if prosecutors are now scrutinizing analysts’ practices of gathering information from a public company’s supply chain—which have a long, established history—that presents an important opportunity for public companies to re-examine their own policies and procedures concerning how such information is tracked and controlled. Here are some questions that public companies will want to consider:

      1. Are analysts interested in, and attempting to obtain, information from our supply-chain?

      If not, then channel checks may be more of a back-burner issue for you. If yes, press on.

      2. As part of our agreements with suppliers, distributors, and manufacturers, do we have confidentiality or non-disclosure agreements (NDAs) in place?

      Implicit in any enforcement action or prosecution that might result from the ongoing channel-check probe is the idea that the information in question is confidential and a company’s suppliers should not be sharing it. Suppliers speaking to Apple analysts, for example, may well be violating NDA agreements with Apple and allowing analysts to access confidential information. That doesn’t differ much from committing insider trading by obtaining information from inside the company itself.

      If the SEC and prosecutors now view supply-chain information as material, non-public information that can support an insider-trading case, then companies should take a fresh look at how they try to prevent the misuse of such information.

      Jacob Frenkel, a former SEC enforcement attorney now with law firm Shulman, Rogers, Gandal, Pordy & Ecker, says that weak corporate controls over supply chains has been a looming issue and was bound to become a compliance headache sooner or later. Frenkel says companies should adopt rules governing the conduct of their business partners, including what information they may share.

      3. If we do have confidentiality agreements or NDAs in place with suppliers, distributors, and manufacturers, are they being violated? And are we seeking to enforce them?

      To continue the Apple example: If traders routinely receive and act upon analyst reports based on supply chain interviews about the company, one wonders whether any NDAs with suppliers are in place or enforced. (Regulators would certainly be wondering about it.) For the record, Apple told the Wall Street Journal that the company does not release that type of information about its production, and declined to comment further.

      Consider this hypothetical:

      Company X’s supply-chain information is material and non-public, meaning Company X or a “person acting on its behalf” could not selectively disclose it to one analyst under Regulation FD without making a public disclosure of that same information; Company X is fully aware that its suppliers are providing supply-chain information regularly to select analysts; and Company X either (a) does not impose an NDA on its suppliers, or (b) does impose an NDA but never enforces it. Is the supplier’s disclosure of information to select analysts, with Company X’s knowledge, a “back door” violation of Regulation FD (or at least the spirit of Regulation FD)?

      4. Are we permitting current company employees to hold discussions with analysts or traders as industry “consultants”?

      Law professor Peter Henning noted in a recent article that many employees are providing information as consultants do so openly, and “it may even be that these consultants were authorized by corporate employers—or it was at least tolerated as a cost of keeping talented employees.” Given the risk that an employee/consultant may end up talking about the company, however, Henning says it is an “interesting issue” why a company would allow one of its employees to consult in this fashion.

      Given the SEC’s intense focus on insider trading, there is certainly more to come on this front, so keep an eye on developments in the coming months. And keep an ear to the ground for those whispers from your suppliers, distributors, and contract manufacturers.

      Jensen Comment
      If it is not illegal to pay Joe on the loading dock for information, this can get terribly complicated. Joe might seek work on the loading dock for the sole purpose of eliciting bribes from traders and hedge fund managers. Suppose Joe gets paid by Trader A to slip information on the types of components being shipped to an iPad assembly plant such as information that iPad is shipping in millions of USB ports. Further suppose Trader B then pays Joe to slip Trader A false information such as falsely claiming iPad is shipping in millions of USB ports.

      As another scenario suppose that Minnie Pearl in the Accounting Department of a USB port manufacturer works in the Accounts Receivable Department. She sees a lot of her employer's billings go out to the iPad plant --- I think you get the picture of how Minnie Pearl donned a new straw hat, moved to Nashville, and bought an expensive acreage that once belonged to another woman named Minnie Pearl.

      The fraud hazards in channel probing are indeed complicated and very difficult to regulate.

      Bob Jensen threads on dirty rotten frauds are at
      http://www.trinity.edu/rjensen/FraudRotten.htm

       

    • Robert E Jensen

      I’m not going to hold my breath waiting for Porter to give some evidence of contrition about his mission to Tripoli. Sir Howard Davies may have resigned as director of the LSE (“The short point is that I am responsible for the school’s reputation and that has suffered”), but being a Harvard professor apparently means never having to say you’re sorry. Perhaps instead the university will find some way to rein in on its professors’ more self-serving ambitions.
      David Warsh, "A Recent Exercise in Nation-Building by Some Harvard Boys," EconomicPrincipals.com, March 27, 2011 ---
      http://www.economicprincipals.com/issues/2011.03.27/1248.html
      Thank you Robert Walker for the heads up.

      It was worth a smile at breakfast that morning in February 2006, a scrap of social currency to take out into the world. Michael Porter, the Harvard Business School management guru, had grown famous offering competitive strategies to firms, regions, whole nations.  Earlier he had taken on the problems of inner cities, health care and climate change.  Now he was about to tackle perhaps the hardest problem of all (that is, after the United States’ wars in Afghanistan and Iraq).

      He had become adviser to Moammar Khadafy’s Libya.

      There at the bottom of the front page of the Financial Times was a story that no one else had that day, or any other – a scoop. It turned out that Porter and his friend Daniel Yergin and the consulting firms which they had respectively co-founded and founded, Monitor Group and Cambridge Energy Research Associates, had been working for a year on a plan to diversify the Libyan economy away from its heavy dependence on oil. Their teams had conducted more than 2,000 interviews with “small- and medium-scale entrepreneurs as well as Libyan and foreign business leaders.” (Both men are better-known as celebrated authors:  Porter for Competitive Strategy: Techniques for Analyzing Industries and Competitors and The Competitive Advantage of Nations, Yergin for The Prize: the Epic Quest for Oil, Money and Power and The Commanding Heights: the Battle for the World Economy.)

      The next day Porter would present the 200-page document they had prepared in a ceremony in Tripoli. Khadafy himself might attend. The FT had seen a copy of the report, which envisaged a glorious future under the consultants’ plan. If all went well, it said, then by 2019 – the 50th anniversary of the military coup that brought Col. Khadafy to power – Libya would have “one of the fastest rates of business formation in the world,” making it a regional leader contributing to the “wealth and stability of surrounding nations.”

      . . .

      We now know that Khadafy’s son bribed his way into his PhD from the London School of Economics (LSE); that Monitor Group had been paid to help him write his dissertation there (much of which apparently turns out to have been plagiarized, anyway); that the Libyan government was paying Monitor $250,000 a month for its services; that, according to The New York Times, Libya’s sovereign wealth fund today owns a portion of Pearson PLC, the conglomerate that publishes the Financial Times and The Economist; that the whole deal quietly fell apart two years later.

      Sir Howard Davies resigned earlier this month as director of the LSE after it was disclosed he had accepted a ₤1.5 million donation in 2009 from a charity controlled by Saif Khadafy.

      It turns out that Monitor also proposed to write a book boosting Khadafy as “one of the most recognizable individuals on the planet,” promised to generate positive press, and to bring still more prominent academics, policymakers and journalists  to Libya, according to Farah Stockman of The Boston Globe. She did a banner job of pursuing the details she found in A Proposal For Expanding the Dialogue Surrounding the Ideas of Moammar Khadafy, a proposal from Mark Fuller in 2007 that a Libyan opposition group posted on the Web.

      Among those enlisted were Sir Anthony Giddens, former director of the LSE; Francis Fukuyama, then of Johns Hopkins University; Benjamin Barber, of Rutgers University (emeritus); Nicholas Negroponte, founder of MIT’s Media Lab; Robert Putnam and Joseph Nye, both former deans of Harvard’s Kennedy School of Government.  Nye received a fee and wrote a broadly sympathetic account of his three-hour visit with Khadafy for The New Republic. He also told the Globe’s Stockman he had commented on a chapter of Saif’s doctoral dissertation. (When The New Republic scolded Nye earlier this month, after Mother Jones magazine disclosed the fee, Nye replied that his original manuscript implied that he had been employed as a consultant by Monitor, but that the phrase had been edited out).

      . . .

      I’m not going to hold my breath waiting for Porter to give some evidence of contrition about his mission to Tripoli. Sir Howard Davies may have resigned as director of the LSE (“The short point is that I am responsible for the school’s reputation and that has suffered”), but being a Harvard professor apparently means never having to say you’re sorry. Perhaps instead the university will find some way to rein in on its professors’ more self-serving ambitions.

      Jensen Comment
      In Chile the Chicago Boys rebuilt a nation with honor. I Libya the Harvard Boys were apparently less honorable.

      And look what a desert swamp we're mired in now!

      . . . being a Harvard professor apparently means never having to say you’re sorry

    • Robert E Jensen

      The International Ethics Standards Board for Accountants (IESBA) has released its 2011-2012 IESBA Strategy and Work Plan, which sets the direction and priorities for the activities of the IESBA.---
       http://www.ifac.org/news-events/2011-10/iesba-2011-2012-strategy-and-work-plan-approved

    • Robert E Jensen

      "IESBA Proposes Changes to The Code of Ethics for Professional Accountants to Address Conflicts of Interest," IFAC, December 20, 2011 ---
      http://www.ifac.org/news-events/2011-12/iesba-proposes-changes-code-ethics-professional-accountants-address-conflicts--0

      Bob Jensen's threads on professionalism in accounting and auditing ---
      http://www.trinity.edu/rjensen/Fraud001c.htm

    • Robert E Jensen

      "Minnesota Accounting Professor's Real World Experience Proves To Be a Double-Edged Sword," Going Concern, April 25, 2015 ---
      http://goingconcern.com/post/minnesota-accounting-professors-real-world-experience-proves-be-double-edged-sword

      Joseph Traxler was the CFO of Centennial Mortgage and Funding Inc. in Bloomington. He helped run an $8 million fraud by misleading banks that allowed Centennial to obtain more loans. He also hid defaults and double-funded mortgages from lenders, as well as little check kiting in order to keep the business afloat (rather than enrich himself [?]). For this hodge-podge of fraudulent activity, he was sentenced to five years in prison, which is a shame, especially since he was such a popular guy at the Minnesota School of Business in Shakopee.

      Traxler joined the faculty of the Minnesota School of Business in Shakopee in January 2009 as chair of its accounting program and has taught the fraud course there three times. That year he was voted the school's top faculty member. The school kept him on even after the charges were filed last September. In January, after the guilty plea, Faculty Dean Linda VanDuzee and Campus Director Bruce Christman wrote to the court: "It would be a significant blow to our students and staff if Mr. Traxler were to leave our school."

      Jensen Comment
      It's ironic that today, on April 25, 2012 a trial is going on where former Senator and 2008 Presidential Candidate John Edwards in on trial for alleged financial fraud ---
      http://en.wikipedia.org/wiki/John_Edwards

      The issue in both instances is how allegedly good guys succumb to engage in financial fraud at a given time and place largely because unique opportunities and circumstances arise in their lives. The rhetorical question is whether they would engage in such frauds in a countless variety of circumstances or whether their frauds depended upon a highly unique set of circumstances?

      Does one cheat for selfish reasons versus cheat to save others such as when cooking the books or refraining  from blowing a whistle will save a company and jobs of hundreds of innocent co-workers?

      Moral absolutism ---
      http://en.wikipedia.org/wiki/Moral_absolutism

      Moral Relativism ---
      http://en.wikipedia.org/wiki/Moral_relativism

    • Robert E Jensen

      "Jenkins: Wal-Mart Is Not Alone:  An Australian firm encounters New York's notorious labor graft," by Holman W. Jenkins, Jr., The Wall Street Journal, April 27, 2012 ---
      http://online.wsj.com/article/SB10001424052702304811304577369800663480684.html?mod=djemEditorialPage_t

      When in Mexico, don't do as the Mexicans do. That was good advice for Wal-Mart, though it perhaps seemed impractical at the time. Now the company is enveloped in allegations that it paid $24 million in bribes to expedite store openings in our southern neighbor.

      Just maybe a little air should leak out of the sanctimony bubble in light of another story this week of corporate innocents blundering around Gomorrah. The Mexican people at the very least are entitled to a twinge of irony.

      In 1999, the Australian giant Lend Lease Group bought a New York construction firm, Bovis, and soon was erecting many modern landmarks, including Citi Field (where the Mets play) and the renovated Grand Central. One thing the Australian company didn't do was upend and purify a 70-year tradition of labor graft in the city's building trades.

      In a settlement announced on Tuesday, the U.S. Justice Department charged that "Bovis intentionally and fraudulently billed clients, from at least 1999 to 2009, for hours that were not worked by labor foremen from Local 79 Mason Tenders District Council of Greater New York."

      A Bovis executive told a judge: "From at least 1999 to 2009, I agreed with others at Bovis to continue the existing practice for laborers at Local 79."

      The company will pay a fine and submit to monitoring. Two executives may face jail terms. But these statements beg an obvious question: What motive would Bovis have for overpaying union workers? Because it was the victim of a labor racket that's been going on in New York for decades and will continue to go on is the obvious answer nowhere alluded to in Justice's lengthy statement.

      About one thing Lend Lease and Justice agree: The illicit practices didn't begin when Lend Lease arrived. They were already entrenched during a period when Justice itself was in control of the Mason Tenders union.

      Justice took over the Mason Tenders in 1995, installing a court-appointed monitor for an initial period of four years, impelled by the testimony of Salvatore "Sammy the Bull" Gravano, the Gambino family underboss who turned on boss John Gotti. Gravano testified that the union, representing unskilled workers, was a mob favorite because the goombahs didn't need special skill or training certifications to qualify for no-show jobs.

      Under trustee Michael Chertoff, the government did much to clean up the city's most mobbed-up union. It halted the looting of the union's pension and benefit funds by another crime family, the Genoveses, under Vincent "the Chin" Gigante, also known as the "Oddfather" for his habit of walking on Sullivan Street in his bathrobe talking to himself (a stratagem to avoid prosecution by feigning incompetence, many presumed).

      What Justice apparently didn't clean up, however, was the practice of extorting no-show payments from builders. In the last year of its trusteeship, the union was raided by the Manhattan district attorney in an attempted crackdown on such scams.

      Graft cultures are hardy for a reason. As much as some arms of government may seek diligently to root them out, others are mobilized to protect them. If you have any doubt, just read former Brooklyn D.A. Burton Turkus's account of the Roosevelt administration's bizarre manipulations to stall New York state's execution of labor racketeer and Murder Inc. chief Louis "Lepke" Buchalter, which the late Turkus attributed to Lepke's connection to labor leaders who were connected to FDR. Of recent vintage is the mystery of Arthur Coia, head of the Laborers' International Union and friend of Bill Clinton, whose pending RICO indictment in 1995 was abruptly dropped, even as one of his constituent unions, the Mason Tenders, was seized by the government.

      Lend Lease has now been paraded for the press, but prosecutors acknowledge that the practices are widespread and continuing. Companies will continue to pay up. The Mason Tenders will remain an important stop for politicians running in the city and state. For all the fulmination, the illegal payments to several dozen union foremen amounted to $19 million over 10 years—a sum to be weighed against tens of thousands of votes represented by building-trades members and their families.

      Ironically, as nonunion builders encroach and compete more successfully in the city, those builders bound by union contracts will be even more pressured to pay union bribes to allow cheaper nonunion workers on site—what this scandal fundamentally was all about.

      Continued in artiicle

      Bob Jensen's Fraud Updates ---
      http://www.trinity.edu/rjensen/FraudUpdates.htm

    • Robert E Jensen

      "Western Governors University embezzler is sentenced:   Courts » Check forger bought home with cash; still owes school $288K," by Cimaron Neugebauer, The Salt Lake Tribune, April 27, 2012 ---
      http://www.sltrib.com/sltrib/news/53997971-78/wilkinson-university-jail-checks.html.csp

      A woman who forged checks worth more than half a million dollars while working for Western Governors University — using a majority of the stolen cash to buy a house — was sentenced Friday to probation, community service and eight days in jail.

      Shelley Ann Wilkinson, 45, of Belgrade, Mont., was charged last year with one count of theft, a second-degree felony, and three counts of forgery, all third-degree felonies.

      Last month, Wilkinson pleaded guilty to two third-degree felony forgery counts and the other charges were dismissed.

      On Friday, Wilkinson stood in tears as 3rd District Judge Elizabeth Hruby-Mills ordered the jail time, 200 hours of community service, along with 36 months probation. Wilkinson also must continue paying restitution.

      Prosecutor Vincent Meister said that of the roughly $526,700 embezzled by Wilkinson, she used some to buy a $350,000 house in Canada.

      "The embezzlement in itself is selfish," Meister said, refuting the defense’s claims that Wilkinson always gave and helped others. "What she stole wasn’t something she needed for subsistence. She bought [another] house and she got caught."

      Defense attorney Taylor Hartley said that after a few weeks after buying the home, Wilkinson’s guilt got to her and she tried to sell it. She later turned the deed to the home over to the university and Wilkinson started paying money back, but still owes the school about $288,000.

      Meister said the most "aggravating factor" is that she had the money to pay back the school right away.

      Continued in article

      Bob Jensen's Fraud Updates ---
      http://www.trinity.edu/rjensen/FraudUpdates.htm

    • Robert E Jensen

      B-School Culture: A Plea for Change," by Philip Delves, Business Week, May 14, 2012 ---
      http://www.businessweek.com/articles/2012-05-14/b-school-culture-a-plea-for-change

      A guest post from Philip Delves Broughton, a former Paris bureau chief for Britain’s Daily Telegraph. Broughton graduated from Harvard Business School in 2006 and is the author of The Art of the Sale: Learning From the Masters About the Business of Life (Penguin Press, 2012).

      In 2007, Rakesh Khurana, a professor at Harvard Business School, published a sharp critique of American B-schools called From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession.

      He argued that MBA programs were flogging a product to students which did nothing to help them improve the business world once they graduated. They were given tools and equipped with skills but left with a gaping hole in the middle of their education where their morality was supposed to be.

      The ruling class of American business, with its obsession with shareholder returns over any broader social good, was a direct reflection of the intellectual and spiritual poverty of business schools. Much of Khurana’s work at HBS is devoted to trying to fix this.

      And now we have one of the intellectual lions of Harvard, Clay Christensen, publishing How Will You Measure Your Life?, a gripping personal story with lessons from business mixed in. Christensen’s decision to venture from innovation, the subject that made him famous, into the personal advice genre was provoked in part by seeing what happened to his peer group from Oxford University and Harvard Business School. (He was recently profiled in Bloomberg Businessweek and the New Yorker.)

      “Something had gone wrong for some of them along the way: Their personal relationships had begun to deteriorate, even as their professional prospects blossomed,” he writes in the prologue of his new book. When his friends stopped even attending reunions, he sensed that they “felt embarrassed to explain to their friends the contrast in the trajectories of their personal and professional lives.”

      Continued in article

      Bob Jensen's threads on higher education controversies ---
      http://www.trinity.edu/rjensen/HigherEdControversies.htm

    • Robert E Jensen

      Ethics Education Library (and tutorials) --- http://ethics.iit.edu/eelibrary/

    • Robert E Jensen

      From the AICPA on June 28, 2012

      Three ethics resources for CPA, CGMAs
      With the importance of ethics and non-financial reporting rising on the global agenda, CGMAs are in a unique position to make an important contribution to creating a sustainable ethical operating environment. The AICPA and CIMA have developed a number of resources to assist CPA, CGMAs in guiding their organizations to long-term sustainability and success. The Ethical reflection checklist is designed to provide organizations and individuals with an overview of how well ethical practices are embedded in the business. The CGMA case study: Navigating ethical issues highlights issues related to non-disclosure at the corporate level that come to the attention of non-executive financial managers and controllers. Responding to ethical dilemmas: CGMA ethics resources provides links to resources to help CGMAs navigate ethical dilemmas and respond in a manner that upholds their professional

      Bob Jensen's threads on professionalism in auditing ---
      http://www.trinity.edu/rjensen/Fraud001c.htm

      Bob Jensen's threads on Tools and Tricks of the Trade ---
      http://www.trinity.edu/rjensen/000aaa/thetools.htm

    • Robert E Jensen

      "Ernst & Young 'covered up judge bribe case’," by Jonathan Russell, London Telegraph, June 30, 2012 ---
      http://www.telegraph.co.uk/finance/financial-crime/9367075/Ernst-and-Young-covered-up-judge-bribe-case.html

      A senior partner closed an investigation into a £100,000 “bribe” despite colleagues suspecting the money had been paid to a judge overseeing a multi-million-pound tax case the company was fighting.

      The allegations were disclosed by former E&Y partner and whistle-blower Cathal Lyons, who is suing the accountant for $6m for breach of contract.

      He claims medical insurance he was relying on to treat injuries sustained in a car accident was withdrawn after he raised the issue of the alleged bribe with the accountant’s global head office in London.

      Mr Lyons was a partner with E&Y’s Russian practice when the alleged wrongdoing came to light. It was originally investigated by James Mandel, E&Y’s general counsel in Moscow. In a witness statement supplied in support of Mr Lyons’s case, Mr Mandel said he suspected the payment may have been corrupt and wrote a report to that effect.

      “I had the suspicion that this payment was not a proper payment for legal fees, but was an illegal payment possibly made to facilitate a positive outcome of a tax case,” he claimed in his witness statement.

      He suspected that the €120,000 payment via a Russian law firm was made to influence a 390m rouble (£8.4m) court case brought by Russian tax authorities investigating a tax avoidance scheme E&Y was using to pay its Russian partners. E&Y was later cleared of liability in the case.

      The accountant has admitted there was an investigation into allegations of bribery, but said the case was closed by Herve Labaude, a senior partner, in January 2010.

      Mr Lyons claims that after he reported his concerns about the case to E&Y’s global head office, his medical insurance was withdrawn and he was dismissed.

      In his writ he says the dismissal flowed from “personal animosity against him rising from a discussion in late 2010 between the claimant and Maz Krupski [E&Y’s director of global tax and statutory] regarding alleged corruption by the practice.”

      Mr Lyons relied on his medical insurance to cover the cost of treatment flowing from a serious car accident he suffered in 2006. The accident left him with permanent disabilities and partial amputation. It is estimated medical cover in his current condition would cost $300,000 per year. He is suing for 20 years’ cover, or $6m.

      Continued in article

      Bob Jensen's threads on Ernst & Young woes are at
      http://www.trinity.edu/rjensen/Fraud001.htm

       

    • Robert E Jensen

      Congress is our only native criminal class.
      Mark Twain --- http://en.wikipedia.org/wiki/Mark_Twain

      We hang the petty thieves and appoint the great ones to public office.
      Attributed to Aesop

      "Countrywide gave home-loan discounts to Washington officials," by Jonaton Strong, Roll Call, July 5, 2012 ---
      http://www.rollcall.com/news/countrywide_offered_discounted_loans_to_members_report_says-215901-1.html?pos=hln

      Jensen Comment
      This is a major reason why Senator Chris Dodd (Chairman of the Senate Banking Committee) did not seek re-election after the news of his loan discount was revealed to the public ---
      http://en.wikipedia.org/wiki/Chris_Dodd

      Countrywide Financial loan controversy Further information: Countrywide financial political loan scandal
      In his role as chairman of the Senate Banking Committee Dodd proposed a program in June 2008 that would assist troubled sub-prime mortgage lenders such as Countrywide Financial in the wake of the United States housing bubble's collapse.[28] Condé Nast Portfolio reported allegations that in 2003 Dodd had refinanced the mortgages on his homes in Washington, D.C. and Connecticut through Countrywide Financial and had received favorable terms due to being placed in the "Friends of Angelo" VIP program, so named for Countrywide CEO Angelo Mozilo. Dodd received mortgages from Countrywide at allegedly below-market rates on his Washington, D.C. and Connecticut homes.[28] Dodd had not disclosed the below-market mortgages in any of six financial disclosure statements he filed with the Senate or Office of Government Ethics since obtaining the mortgages in 2003.[29]

      Dodd's press secretary said "The Dodds received a competitive rate on their loans", and that they "did not seek or anticipate any special treatment, and they were not aware of any", then declined further comment.[30] The Hartford Courant reported Dodd had taken "a major credibility hit" from the scandal.[31] At the same time, the Chairman of the Senate Budget Committee Kent Conrad and the head of Fannie Mae Jim Johnson received mortgages on favorable terms due to their association with Countrywide CEO Angelo Mozilo.[32] The Wall Street Journal, The Washington Post, and two Connecticut papers have demanded further disclosure from Dodd regarding the Mozilo loans.[33][34][35][36]

      On June 17, 2008, Dodd met twice with reporters and gave accounts of his mortgages with Countrywide. He admitted to reporters in Washington, D.C. that he knew as of 2003 that he was in a VIP program, but claimed it was due to being a longtime Countrywide customer, not due to his political position. He omitted this detail in a press availability to Connecticut media.[37]

      On July 30, 2009, Dodd responded to news reports about his mortgages by releasing information from the Wall Street Journal showing that both mortgages he received were in line with those being offered to general public in fall 2003 in terms of points and interest rate.[38]

      On August 7, 2009, a Senate ethics panel issued its decision on the controversy. The Select Committee on Ethics said it found "no credible evidence" that Dodd knowingly sought out a special loan or treatment because of his position, but the panel also said in an open letter to Mr. Dodd that the lawmaker should have questioned why he was being put in the "Friends of Angelo" VIP program at Countrywide: "Once you became aware that your loans were in fact being handled through a program with the name 'V.I.P.,' that should have raised red flags for you."[39]

       

      The Most Criminal Class Writes the Laws ---
      http://www.trinity.edu/rjensen/FraudRotten.htm#Lawmakers

      Bob Jensen's Fraud Updates ---
      http://www.trinity.edu/rjensen/FraudUpdates.htm