Scientific Glass Sg Provides Specialized Glassware Finance Essay

Scientific Glass Sg Provides Specialized Glassware Finance Essay Scientific Glass provides specialized glassware for a variety of organizations such as pharmaceutical companies, hospitals, research labs, quality-control sites and testing facilities. As of  January 2010, there was a substantial increase in their inventory balances which tied up the capital necessary for further investment needed for expansion. The debt-to-capital ratio surpassed the target of 40% preventing the company to use their capital in other areas. In addition, the shipping costs were rising, competitive pressures were accelerating, and certain markets in North America and Europe were becoming saturated which underscored the necessity for capital investment for expanding market opportunities in Latin America and Asia. Moreover, expanding warehousing network increased the inventory levels along with costs, documentation complexities and errors. The company hired a new Manager of Inventory Planning, Ava Beane, to come up with an effective plan to manage SGà ®Ã¢â€š ¬Ã¢â€š ¬s inventory without requiring a large capital investment. In order to finance operations in year 2010, SG requires an external funding of $53.8 million (Exhibit1). These expenses would further limit the company to use their existing capital in other areas such as research and development and expanding to international markets. To improve customer service levels, SG had increased the target customer fill rate to 99% and added six more leased ware houses to meet the demand more accurately. This led to an increase in the inventory levels as some warehouse managers kept extra inventory in order to meet the company target fill rate. Good practices Maintained continued sales growth and higher customer satisfaction Produced creative products with lower life cycle costs Focused on durable products, innovative designs and superior customer services Reduced time between ordering and delivering the products to the customers Bad practices Treated inventory management as an afterthought, due to which inventory imbalances were increasing The company exceeded its target debt to capital ratio of 40% Incurred both underage and overage costs High Inventory Problem Due to increasing in customer service level, SG planned to add regional warehouses in many parts US. SG has the main and the largest one in Waltham, MA, which is next to manufacturing plant. SG also has another warehouse that located outside of Phoenix,  Arizona. However, at the end of 2008, SG bought other six warehouses. This means SG has the total 8 warehouses to serve customers. Annual rental and operation costs for North  American warehouses were 15% of the cost of the warehoused inventory. However, in 2006, before add more 6 warehouses, SG already made investment to expand the warehouse at Waltham in anticipation of continued growth, but after these 6 warehouses had been bought, this warehouse does not work full efficiency of its capacity.  Another problem of warehouse management is company expected to reach high level of  customer service to 99%, so that warehouse managers keep order inventory ahead before it reach threshold of inventory level to order new one to assur e that they will meet the customer service target level at 99%. This situation causes high inventory levels than required and also high inventory turnover. Moreover, salespeople were allow having its products up to $10,000 worth from ware house and kept them in trunk stock in their homes and cars in order to deliver this inventory on short notice to any customer who was within driving distance. This amount could lead to high finished goods in warehouse and in-transit as shown in exhibit 6. It could lead to missing products in inventory, and lost. Proposed solutions to inventory problem In order to solve the inventory issues, there are actually two main aspects to consider: Number of warehouses and their structure can be changed; Related policies can be changed and of course appropriate ones can be done simultaneously. For changing the number of warehouses, in other words, centralizing or decentralizing warehousing functions, available options are considered as: Centralized warehousing in Waltham: In this option, one central warehouse near to manufacturing facility at Waltham will send all customer orders from one location. Centralize warehousing in Waltham to meet demand in Southeast and Northeast regions using delivery service of Winged Fleet as their rates are cheaper for these two regions. This would allow SG to pool its inventory in order to meet demand. However, the customer response times would increase Decentralized warehousing: In addition to the main warehouse at Waltham, there would be another warehouse at Dallas which would be supplied from Waltham. This would allow demand to be met for all the regions and prevent any stock-outs in a single warehouse. Continuing with 8 warehouses: This option makes no change on the network of the warehouses and all regions will be supplied its warehouse if there is no stock-out occurs. Two centralized warehouses: In this option, addition to the main warehouse at Waltham, there will be an additional warehouse at the west, at Phoenix, and it will be supplied from Waltham. Demand of east region will be met from Waltham, demand of west region will be met from Phoenix and demand of central region will be met from both warehouses, assuming to have equal shares on the central region. Outsourcing the warehousing functions: In this option, all warehousing actions will be outsourced to Global Logistics (GL) and distribution will start from main warehouse at Waltham and then GL will be responsible from rest of the operations. Outsource warehousing to GL to meet demand in the Central, Southwest and Northwest regions because shipping costs for those regions is cheapest with the GL rates. Outsource warehousing to Global Logistics (GL) which will provide a centralized warehousing in Atlanta. Goods will be transported in bulk from Waltham to Atlanta and GL would take responsibility of inventory-control and delivery to the customers. This way SG would not have to bear the warehouse rental charges and could focus on increasing sales and develop newer products to meet customer needs. Changes in inventory policy: In addition to these options, Beane should propose the following actions to Eric Gregory and Melissa Hayes Lower fill rates to the industry-average in order to decrease inventories. Greater enforcement by managers to avoid keeping excess inventories in the warehouses. Have periodic reviews of inventory and control procedures for all stocks in the warehouses. Evaluations of the proposed solutions Evaluation of mentioned alternatives will be conducted from mainly five aspects: Transportation costs, Average inventory levels, Time responsiveness, Fill rates and Additional costs and benefits Transportation Costs: Transportation costs for alternatives are calculated for the two products, namely Griffin and Erlenmeyer, since they are mentioned as the best representative for a total of nearly 3000 products of Scientific Glass. In addition, for each option, demand for the next year calculated considering the 20% increase in sales. When warehouse to customer shipments are considered average shipment weight of 19,5 pound is used and to have an average transportation cost value, these two products costs are averaged according to their relative proportion in sales . It also be mentioned that, inter-warehouse transshipments occur only when stock-out occurs and as the number of warehouses are decreasing, effect of this costs will be diminished; therefore, it is only considered in the option where there are 8 warehouses. For the 1st option, having 8 warehouses and making no change, from Waltham to all other 7 warehouses all items are sent by bulk shipment. Inter-warehouse transshipments are calculated by bulk  shipment rates and they are considered only when a stock-out occurs, therefore fill rate is included in these calculations and average total cost found as $2701, 41 For the 2nd option, when there is only one warehouse, all customer shipments are calculated for rates of Winged Fleet. In this option, average total cost is calculated as $12210, 16. For the 3rd option, when two centralized warehouses considered, it is assumed that Waltham will supply east region, Phoenix will supply will west region and they will equally supply the central region. Average total cost is found as $2332.07. For the last option, when warehousing functions are outsourced, assuming the 5 regions of  Global Logistics (GL) will have equal amount of demand. Total average cost is calculated as $2276, 83. To conclude, as it is expected, when numbers of warehouses are decreased transportation costs are increased. From the aspect of transportation costs, GL option has the smallest cost amount. Average Inventory Levels: First of all, it must be decided which inventory policy that the company should apply. Begin with the review type; although firm monitors the entire inventory transfers from Waltham warehouse to other warehouses; they think taking physical counts of inventory at all warehouses. Therefore, it is concluded that company uses periodic inventory review policy. Secondly, company did not mention any due date, therefore the inventory plans should consider infinite time horizon. And lastly, though there exists a fixed cost for shipments from warehouses to customers; there is no other fixed cost related to transportation to the warehouses, i.e. no fixed ordering cost. The only order cost is $0.40 per pound bulk shipment cost which is a variable cost with weight. As a result, all analysis can be conducted considering critical ratios and the related fill rate values, which is the only option that is left and also it is considered as the most applicable to the situation. Since some of the simultaneous changes can be done, considering ceteris paribus principle and when fill rate is maintained exactly as 99% for all warehouses, we can calculate the average inventory level that must be kept at warehouses. Weighted-average biweekly inventory levels are found as: 8 warehouses : 98853 2 warehouses : 68034 1 warehouse : 59703 Outsourcing : 59703 When outsourcing option is used, it will be the same for the company in the sense of kept inventory levels for the one-centralized-warehouse option therefore they are assumed to be equal. As number of warehouse decreases, level of inventory decreases as it is expected. This is because, the greater the degree of  collaboration, the lower the uncertainty (standard deviation of the error or coefficient of variation) of  the demand model This implies that the money tied up in the inventory decrease sand this extra capital can be used in other areas, like expansion plans to international markets Time Responsiveness: Delivery system of the company compensates 2 weeks of shipment cycles including the stock-out situations. In order to be a market leader, differentiation on this subject is also needed and unfortunately since this is not an exact quantitative scale, only possible situations could be mentioned. For having one centralized, or two centralized or 8 decentralized warehouse options, they all include at most 3 days ready to shipment duration and Winged Fleets delivery time of at most 3 days if there is no stock-out situation and the stock-out probabilities are diminishing with the aggregated demands. On the other hand, GL has 1-day premium shipment in addition to 3-day regular shipments. Considering the highly growing market situation and different segment of products, having different delivery times to different products and also to different customers will make this company focus on the most yielding areas. Therefore, it can be said that working with GL has the advantage of differentiating customers/orders and, since there will be 2 warehouses, stock-out probability and related durations will be less compared to other options. And all of these aspects will increase the time responsiveness of the company. Additional Costs and Benefits: Quantitative issues to related to options of inventory management In order to continue with the current warehouses total of $10M investment is necessary, it is assumed that all of this amount will be equally shared among all warehouses. Since warehouse operating costs will be the %15 of the total warehoused inventory, these costs could be directly compared with the annual average inventory levels that are kept in each option The amount paid to sales forces will not change when the company has 1, 2 or 8 warehouses because it is assumed that as the number of warehouses decreased, number of salesperson per warehouse will increase and total of 32 will not change. On the other hand, when warehousing is outsourced this amount will not be paid Qualitative issues to related to options of inventory management When GL is used for warehousing, SGs senior managers will be able to focus on increasing sales, marketing issues and developing next generation of products. There are some issues that must be mentioned from the proposed policy changes. Stopping the practice of trunk stock could conclude with a decrease in the time responsiveness and therefore it should not be stopped. Also as mentioned in the same proposed policy changes, improving thec ontrolling systems will create a better understanding of the current situation after the warehousing functions changed. Finally, when GL is used, the approach of warehouse managers to keep more than99% fill rate and 60-day-supply will not be a problem, because all of these operating issues will be responsibility of GL. This will help to company not to keep excessive amount of inventory and less tied-up money in the inventory which can be used in other areas. Fill Rate: Companys fill rate policy should also be calculated for the different alternatives. The company replaced the earlier fill rate policy of 93%, which is only marginally better that the industry average fill rate of 92%, with 99%. However, there is no sign that the company is implementing this policy because it is the best approach that must be taken for the company objectives. Moreover, using a fill rate higher than optimal level leads to higher inventories and more money tied up in the inventory. Therefore, company should lower the rates down to optimal levels, if there is no other concern related to market leadership or customer satisfaction. To calculate the optimal levels of fill rates for all four alternatives we should consider cost items which are added to underage and overage costs. However, the sales leadership noted that underage costs are 10% of the gross margin and overage costs are 0.6% of the unit cost of any product. Also it is assumed that unit costs covers all the costs such as warehouse rental and operation costs, cost of capital and inventory write-offs. For the three alternatives other than outsourcing, there is no change in cost items, only the multiplied quantities are changed; but the outsourcing alternative eliminates the 15% warehouse rental and operating costs and 1% inventory write-offs. As a result, overage costs are decreased while underage costs are increased. Resulting optimal fill rates are as follows: 1, 2, or 8 warehouses Outsourcing Reference product 1   95.4% 96.5% Reference product 2   94.9% 96.1% These numbers can be interpreted in two different ways: If company is flexible about the determination of fill rate, in other words if it can lower the fill-rates from 99% to optimal levels, outsourcing option pushes the optimal fill rates to higher levels which results in larger inventories and more money to tie up. If the company still insists on keeping fill rate at 99%, the additional costs that must be paid to maintain 99% fill-rate level is lowered in the outsourcing alternative. Consequently, the better policy related to fill rates depend on the attitude of the company. Finally, another policy change about fill-rates can be considered. Rather than using one fill-rate for over all products of the company, different rates for different products can help the company in decreasing inventory costs related to, at least, for some of the products. Conclusion To conclude, since available options are studied from different aspects, it must be mentioned that the company should choose the alternatives and compare the results of evaluations according to their priorities. For instance, evaluation criteria like inventory levels and transportation costs are conflicting on interests. Company can see their situation and make decisions according to priorities. While assessing the weights for factors, it is considered that average inventory level and the transportation costs are the most important costs for the company. Then, the fill rate follows them. Time responsiveness is the next important factor which is followed by additional costs and benefits with equal weights for each. Changes in warehouse management are considered as options other than outsourcing do not provide radical policy changes which could make warehousing management better. These weights and the scores related to our previous investigations yield that the outsourcing the warehousing function to Global Logistics is the best alternative among all. All of investigations and cost studies conducted in this case study are to find the most cost effective option in order to getting closer to the target debt to capital ratio of the company and provide more capital to fund expansion into new international markets while maintaining or even improving the high customer satisfaction level

Coiled Tubing :: coil tube coiled tubing

First of all, what in the world is coiled tubing? Otherwise referred to as CT, coiled tubing is a manufactured product used in field operations such as well service, workover applications (petroleum industry well work), and drilling and completion applications. Just as is sounds, CT is essentially a continuous tube with a diameter of .75 inches up to 4.5 inches that is reeled onto a spool, which has a core diameter of approximately eight to twelve feet. The tubing is made from rolling strip metal, usually a carbon based steel, into cylindrical form and weld along its entire length. The longitudinal weld is made using a high-frequency induction electrical resistance method. The welding process produces a small amount of weld flash on both the inside and outside of the tube. This is removed from the outside diameter of the tube after welding by a carbide cutting tool contoured to the diameter of the tube being produced. The weld vein is instantly re-heated to re-crystallize the w elded zone to match the grain composition of the base metal. So in other words, you have this extremely long steel tubing coiled up like a garden hose on reel without any visible end welds. The entire length is non-destructively inspected, then gauged and hydrostatically tested to assure the pipe meets customer specifications prior to shipment. A single spool can carry an average length of approximately 15,000 feet but have been fabricated up to 30,000 feet depending on the diameter of the tubing. Tubing continuously wraps and unwraps over its spool and over the tubing directional arch (â€Å"gooseneck†) as it goes in and out of the well. This bending and straightening causes an extreme amount of wear and tear. This process is known as cyclic bending and along with the internal pressure may result in a life expectancy of less than 100 cycles. Another downfall is the tendency for the walls to thin, thus increasing the diameter of the tubing as cycles increase. Tests have shown up to 30% increase in the diameter. This plastic type growth is sometimes referred to as ballooning. This effect is worse on the tubing that does not rotate during deployment and the walls thin more on one side that the other. Elongation is another effect that results from the forces of fieldwork, with reports stating up to ten feet of permanent elongation per trip!

A Reaction Paper on the Article on Studies in the Area of Brain Research

The article, â€Å"Studies in the area of brain research, reported from Tel-Aviv University.   (2008,  November). Health & Medicine Week,1224.   Retrieved December 2, 2008, from Research Library  database.(Document ID:  1584699101), is a case study that aims to present an argument to question or disprove Charles Darwin’s Theory of Evolution which, according to the research conducted,   Darwin recognized that the conditions of life play a role in the generation of hereditary variations as well as in their selection.The problem being investigated and is currently subjected to a crisis is Darwin's Theory of Evolution by natural Selection.Due to several tremendous advances made in molecular biology, biochemistry and genetics over the past fifty years (Darwin's Theory of Evolution, n.d.), the main argument of the recent study conducted by the Tel-Aviv University, Israel is that â€Å"it is clear that a notion of hereditary variation that is based solely on randomly va rying genes that are unaffected by developmental conditions is an inadequate basis for evolutionary theories† and that â€Å"such a view not only fails to provide satisfying explanations of many evolutionary phenomena, it also makes assumptions that are not consistent with the data that are emerging from disciplines ranging from molecular biology to cultural studies.†The data collection method used for this article, written and reported by the Tel-Aviv University in 2008 to question Darwin’s theory of evolution, is mainly research on the results of several studies conducted in the various disciplines abovementioned and the study that they conducted,   Evolution in Four Dimensions (2005), wherein they identified the four types of inheritance namely (genetic, epigenetic, behavioral, and symbol-based) which can provide variations on which natural selection will act, to further solidify their argument.The conclusion of the article, Studies in the area of brain rese arch reported from Tel-Aviv University.  (2008,  November). Health & Medicine Week,1224.   Retrieved December 2, 2008, from Research Library  database. (Document ID:  1584699101), is that the premise, notion andbasis of several theories of evolution that has arisen throughout the years from Darwin’s theory of evolution by natural selection is an inadequate basis for the evolutionary theories. Due to the fact that to understand the evolution of human behavior, it is important to clearly understand the four dimensions of heredity the study reached a conclusion that â€Å"the genome is far more responsive to the environment that previously thought and that not all transmissible variation is underlain by genetic differences†.They also have found out that â€Å"a better insight into evolutionary processes will result from recognizing that transmitted variations that are not based on DNA differences have played a role.†ReferencesARTICLEStudies in the area of brain research reported from Tel-Aviv University.  (2008,  November). Health & Medicine Week,1224.   Retrieved December 2, 2008, from Research Library  database. (Document ID:  1584699101).WEB PAGENo Author (n.d.). Darwin’s Theory of Evolution – A Theory in Crisis. Retrieved December 5, 2008, from http://www.darwins-theory-of-evolution.com/

Ethics and Financial Services Essay

Question A1 Outline the frauds identified in the case and explain the inconsistencies with proper accounting treatment. Relate your answer to broad accounting concepts and accounting standards where relevant. (8 marks; approximately 800 words) Answer: Livent Inc. is a theatre production corporation registered in Toronto, Canada. Therefore, all the accounting behaviours were subject to the General Accepted Accounting Principles (GAAP) of Canada. In a broad sense, the GAAP imposes four main constraints on the accounting behaviours of companies – objectivity, materiality, consistency and conservatism. In the case of Livent Inc., there are several behaviours that was inconsistent with the proper accounting regulations in general. Large kickback scheme At the very beginning of the entire fraud by Livent, the two executives, Drabinsky and Gottlieb, fabricated transactions that did not exist at all, in order to transfer the revenue of the company secretly to their own pockets. They made the fake transaction on their balance sheet by colluding with their vendors. Drabinsky and Gottlieb received the money from vendors and asked them to fabricate evidences of charging fees. Manipulation of accounting records The kickback scheme sacrificed the net profit of the company, and as a result, Drabinsky and Gottlieb started manipulating the records. There were evidence from later investigation that Livent was exaggerating its revenue from the box office to show that it kept good income statement with good  profit. Also, they asked the accountants at Livent to modify the financial statements to hide the potential financial problems Livent had and to exhibit good operating performance to attract more investment. Drabinsky even used special software to manipulate the financial statements to make them as if they were the original record and hard to be detected. Keeping the fraud as secret to auditors With the help of the special software, Livent Inc. was able to keep two records of their financial performances, the phony one and the real one. And the outside auditors did auditing of Livent based on the phony financial records Livent provided. Therefore, the Deloitte, Livent’s outside auditing company, could hardly see signs of fraud during annual auditing. Significantly, the fraud of Livent Inc. broke the accounting principle of objectivity, which is also the primary standards companies should stick to. The objectivity principle basically requires that all kinds of financial statements the companies offer should be based on the facts. That is to say, every transaction and item recorded in the financial statements should be supported by unbiased and objective information. Under no circumstances are the managers, shareholders and accountants allowed to fabricate or distort any accounting reports and materials of the company. However, what Drabinsky and Gottlieb did at Livent went against the accounting standards. The fact that the two partners urged the internal accountants to modify the seasonal expenses and liability is definitely away from the proper professional behaviours. Livent benefited from manipulating its performance with additional investment and bank loans, which boosted aggressive expanding plans of Livent. It is even intolerable that the company invented the special software, which allowed unlimited arbitrary modification of all the accounting records of the company. This made the fraud much easier and less likely to be discovered because it enabled the manipulation looked as if they were the original data. Elrod and Gorhum (2010) made quantitative research on the way of detecting fraud by examine the extent to which the cash flow from operation and the earnings from continuing operations are correlated. Livent Inc. forced the accounting staff in the company to comply with the fraud behaviour without any doubt. The executives showed a â€Å"matter-of-fact† attitude toward the fraud. The accountants, independent auditors were not working independently and objectively as required by GAAP. On the contrary, they have been coerced or instructed to make fake accounting records, and did not show cooperation with the independent outside auditors. GAAP intends to ensure auditor independence. But Messina used her previous influence at Deloitte to disturb the independency of Deloitte auditors in examining the financial performance of Livent. The objectivity principle additionally restricts unreliable reports, materials and sheets offered to the auditors for annual auditing. Under the current accounting principles and standards in Canada and the United State, the auditors are responsible only for ensuring the preparation of all the accounting documents of the company align with the GAAP. But the outside auditors do not have access to the detailed daily record of the company. Therefore, the annual auditing is unable to prevent managerial collusion if the company provides counterfeit accounting materials. Livent was giving the fake balance sheet, income statement and other reports to Deloitte, which is not allowed by the accounting standards to a broad extent. Some companies correct their cheating behaviour when the situation improves, which makes it even harder to be detected. Nonetheless, such behaviours done by Livent are inconsistent with the standard professional ethics and regulations. Moreover, the aggressive developing strategy Livent had taken also violated the conservatism principle that the GAAP requires. This principle asks the accountants to exclude the uncertain income or revenue, while include the possible losses and risks in the financial statement. The conservative accounting behaviors are necessary because they can effectively prevent the shareholders and investors from potential losses. But in this case, Drabinsky is in such a haste to pursue aggressive development of the company, and obviously was exaggerating its revenue as well as concealing its losses. Question A2 Describe the corporate ethical culture at Livent Inc. How did this culture affect employee behaviour? Explain and justify your answer. (12 marks; approximately 1,200 words) Answer: Several researches supported the argument that the corporate ethical culture had large influences on the behaviours of the employees and their ethical judgements. The company does not have to have a specific code of ethics for the employees to constraint their ethical behaviours. The corporate environment in itself is enough for influencing the ethical behaviours inside the company. Nwachukwu and Vitell (1997)’s research found that the ethical culture in corporate has certain impact on the moral conviction of the employees upon what is right and wrong. Fraudulent behaviour was a very significant issue in the development of companies. It was because that it had tremendous impacts on the corporate, the employees as well as the public. Also, the difficulties in preventing such behaviours were to define, prevent and detect it. Schwartz (2013) made research and emphasized the three key factors in maintain an ethical corporate culture in the company. They are the set of ethical beliefs or values throughout the company, establishing â€Å"formal ethics program† and the ethical leadership throughout the development of the company. However, in the case of Livent’s fraud, all the three factors were lack in the system of the company. They had no clear ethical values, as the self-regulation mechanism, set and administrated inside the company to constraint the behaviours of not only the employees, but the senior executives as well. The unethical culture set by the top executives had not only influenced, but also forced all the staff, especially the accountants, to cooperate and to help conceal the fraud from being detected by the outsiders. This caused the company running under a set of very unethical corporate culture. It seemed to be routine to manipulate the financial records in Livent Inc. for quite a long time. As early as the year of 1990, Drabinsky, together with his best partner Gottlieb, began the kickback scheme to illegally create fake transactions to transfer money from the company to their own pockets. Then later Dranbinsky and Gottlieb had to tell even bigger lies and got more people involved in in order to make up for the expense losses from the kickback plan. The company lacked ethical leadership from the very beginning. To make the financial performance of Livent look promising,  Drabinsky and Gottlieb meddled in the daily accounting records as well as the preparation of the annual financial statements that were handed in and were examined by the auditing company, Deloitte. The executives and the senior level staff were not establishing positive example inside the company so as to maintain a positive ethical corporate culture. What’s even worse, they acted as the leading role in such fraudulent behaviours and arbitrarily got the other employees into the serious fraud scheme. Drabinsky and Gottlieb shouted at and coerced the staff and even the senior level managers to fulfil their ambition. They developed a specific computer software inside the company’s accounting system, so that they were able to take control of the financial status of the company. They could adjust any amount and transaction records in the system to make the quarterly, semi-annually and annually report of financial performance of Livent look promising to invest in. Even worse, by applying the software, Livent was able to cheat on the accounting records as if they were the raw figures, and avoid being discovered. It had also facilitated the fraudulent behaviours and motivated the employees and the executives to fraud continuously. Another serious issue inside Livent, besides the manipulation of the accounting records and financial statements, is the overwhelming attitude of viewing fraud as a matter of fact among executives as well as the employees. Even if some of the accounting staff including Messina and Webster questioned the unethical behaviours they got involved in, they were influenced by the overall environment and paid no attention to the fraudulent behaviours in Livent. They took for granted that what they did was to follow the instructions of the executives so as not to get fired. The employees would see Drabinsky shouting and bullying the accountants and even the senior level staff in the company if they had any different opinions against him. This was in fact establishing bad example for the employees and was to warn the other staff to just accept the deviant behaviours as a matter of fact. For a long time, employees were aware of the fraud happening, but were unwilling to avoid it. Llopis et al. (2007) argued that â€Å"effective communication is essential for the ethical message to be properly assimilated†. However, in Livent, the top two executives, Drabinsky and Gottlieb, were much too autocratic in the way of managing the company. There  were barely any information about the ethical culture passed to the employees, and the staff had little freedom to do their job but to listen to Drabinsky’s instructions. Last but not least, Livent Inc. lacked proper self-regulation mechanism to prevent the non-ethical behaviours. More often than not, self-regulation are considered as the last prevention of bad corporate ethical culture. Schwartz (2013) pointed out that the set of ethical value of the company was critical for making ethical decisions. Real self-regulation should not be independent of the public interest. Instead, the behaviours under self-regulation should be compatible with the social values and principles. In addition, as the ethical value of the company should not be arbitrarily decided by the executives or a few people in the company; instead the set of ethical value should gain the consent of the majority of the employees (Llopis et al. 2007). Yet, what the set of value acquiesced by the employees in Livent went against the public’s interest, and thus led to the unethical corporate culture overall. Formally, inside Livent, they did not have complete ethical programs including regulations on the professional operation of each position to prevent fraud. The ethical value of the company should be clearly stated in the policies and regulations, or even set incentive mechanism to encourage the employees to follow and to form good habits. In conclusion, there were three factors causing the unethical corporate culture inside Livent. The first is the long-standing fraudulent behaviours from the top executives, which were then passed down to the employees of lower levels arbitrarily. Second element of the unethical culture was the attitude of taking committing fraud as a matter of fact, and thus no one in the company were willing to discourage it. Finally, the lack of internal ethical corporate regulations or values established throughout the company accelerated the forming of unethical corporate culture. Working under such environment, the employees got involved in the fraudulent behaviours willingly or unwillingly forced by their boss. Moreover, their original ethical judgement became vague as they got used to the prevalent fraudulent working culture after a long time. They loss the sense of justice to judge the right and the wrong things. They might even rationalize what they had  done to be just and necessary. PART B Question B1 Why do you think Maria Messina become complicit in the fraud(s)? Explain your answer using the fraud triangle. (15 marks; approximately 1,500 words) Answer: The fraud originally started with the large kickback scheme by Drabinsky and Gottlieb, and finally Maria Messina, as the chief financial officer of Livent, got involved and helped in the huge fraud. Messina’s motivation to become complicit in the fraud can be explained by the theory of fraud triangle, which reveals much of the psychology of committing a fraud. The three key factors in the fraud triangle, considered as prerequisites of fraudulent behaviours, are the pressure, the opportunity and the rationalisation of doing it. Pressure The pressure of committing the fraud, according to the theory of fraud triangle, is more often than not â€Å"non-shareable† (Dellaportas 2013). The type of pressure may be related to financial issues, or may come from the job and working atmosphere. Dellaportas (2013) pointed out that the evil ideas can also be the source of pressure that causes fraud. People in Livent who joined in the fraud had different reasons of incentive to do illegal things as they had different kind of pressure. For example, for the two executives, Drabinsky and Gottlieb, they shared financial pressure. At first, their greed for money stimulated them to design the large kickback plan to secretly transfer money from the company to their own pockets. And later, just as Brenna and McGrath (2007) described in the paper, the executives had the motivation to fraud to keep the company at good performance so that they could gain high bonus as well as keep continuous outside investment for the company. But the motivation and pressure for Messina was a little different. Although as CFO of Livent, her bonus was linked with the performance of the company, the evidences in the  case and in the trial were insufficient to decide whether her fraudulent behaviour was directly motivated by financial pressure. However, it is clear that she was forced to involve in the fraud, like many other accountants at Livent, because of the coercion of Drabinsky and Gottlieb. Messina testified that the executives including Drabinsky would shout at the accountants and force them to cooperate in work. She worked under the pressure of the executives in the company. Messina would be at the risk of losing her job if she did not follow the instruction of Drabinsky. The financial situation was negative long before Messina joined Livent, meaning the fraud had already started before Messina was able to stop it. Taking over the responsibility of managing the financial performance of the company, she was faced with the situation out of her control. The environment of fraud and routine to manipulate the financial records had long been formed. The frequent use of software that enabled Drabinsky to easily manipulate the financial records and financial statements as much as he wanted was a common behaviour in Livent, acquiesced by everyone in the company. Under the threat of Drabinsky, Messina thus had no choice but to try her best to manage the fraud from being detected, making herself really exhausted by the daily work. The pressure Messina faced as the chief financial officer was unable to share with other colleagues and she was forced by the financial pressures to involve in the fraud. She could feel the threats from Drabinsky and the already very troublesome financial situation. And she could perceive that her subordinates and other staff in Livent were suffering the bully and coercion from their executives as well. Opportunity The factor of opportunity in the fraud triangle refers to the ability to commit the fraud and in the situations like the one in the case, such opportunity mainly results from having specific professional skills or knowledge. That is to say, the person was able to manipulate skilfully and knew how to avoid being discovered by his supervisors or regulations. In addition, the trust that the person is able to accomplish the job in accord  with laws also contributes to the opportunity. The trust existing in the relationship between the supervisor and the employees may contribute to getting authorized without careful screening. The trust caused the space of opportunity to fraud expanded. In case of Livent, Messina was an experienced accountants as well as a Chartered Accountant, who had been promoted to partner of the Deloitte &Touch, LLP in Canada. Her previous experience in the industry enabled her to have a good knowledge both in accounting and auditing. That is to say, Messina potentially knew how to manipulate the accounting records daily and prepare the fraudulent financial statement annually. Also, she understood the normal practice of outside professional auditors, who were responsible for examining the financial performance of the company and avoiding inconsistency with the GAAP. Thus, Messina could give professional advice to Drabinsky and Gottlieb so that their manipulation of the accounting records would not be detected in the annual auditing. Besides her professional knowledge and skills in assisting in the fraud in accounting, the opportunity for Messina to get involved also includes the trust on her and her influence in her previous company. Messina had worked at Deloitte Canada for quite a long time and had been promoted to position as partner before she left the company and became CFO of Livent Inc. She had therefore built broad relationship within Deloitte, who was the outside auditing firm for Livent at that time. As Dellaportas (2013) pointed out in the research, insufficient internal regulation and supervision upon such fraudulent behaviours prompted the fraud to continue without being detected by others. However, in the specific case of Livent, there was no self-regulation mechanism at all, since the entire company, from the executives to the employees of the lowest-level, got involved in the fraud. Thus, it was hopeless to discover and discourage such deviant behaviours by the people inside the company. This caused the fraud of Livent to continue to expand and to be very serious. Rationalisation The rationalisation is not rational, instead it is an excuse for the person  who commits the fraud to justify the behaviour to himself. Coleman (1987) discussed this factor of fraud within the context of white collar crimes, and he argued that rationalisation is not an â€Å"after-the-fact† excuse. In fact, people who commit the crime do not realize that their behaviours are deviant. A large number of white collar crime criminals argued that they considered the laws to be unjust or unreasonable, causing them to break the rules (Coleman 1987). The factor of rationalisation is more risky than the other two factors because the people who have violated the laws believed that they had the right reason to do so. He also mentioned other common argument of the fraudulent behaviours. They claimed that such behaviours were the only way for them to achieve the goal or to â€Å"survive† (Coleman 1987). Based on the research results from Dellaportas (2013), he identified the three most common way of denial that people think to justify their fraudulent behaviours. People would rationalize their behaviour as they deny the â€Å"responsibility, injury and victim†. First, the offenders will shirk responsibility and say someone else are supposed to be in charge of the fraud. Secondly, they justify what they have done by arguing that there is no victim in this situation. Finally, if there is victims, the offenders may consider that the victims deserve the sufferings. Thus, they are free from taking responsible or even committing their fraud is illegal. Definitely, there were rationalisation inside Messina that made her behaviour â€Å"just† according to her own value. After quitting the partner position at Deloitte, Messina believed it to be right or rational for her to help Drabinsky in the fraud. Or otherwise, she would lose her job and would be unable to survive. And the overall atmosphere inside the Livent, considering what they were doing as â€Å"matter of fact†, alleviated the employee’s sense of responsibility for the fraud. Messina could hardly feel guilty and never considered about the consequences of helping the company’s fraud. She might rationalize her efforts in the fraud as under the instruction of Drabinsky, instead of out of her own willingness. The above analysis clearly dissected the reasons why Messina became complicit in the fraud from the perspective of psychology. However, as Dellaportas (2013) discussed, the influence of each factor in the fraud triangle varied  from case to case, and was not often equally impacting the fraud behaviours. Recent researches intend to improve the fraud triangle by considering additional factors into the model to better understand the behaviour of fraud in current times. What Messina had done assisted the fraud in Livent to continue for quite a long time after she joined Livent. Messina became the complicit in the serious fraud due to the pressure she was facing, mainly financially, the opportunity she was able to take advantage of and the rationalisation she found for herself to justify her deviant behaviours. Dellaportas (2013) discovered, through case study from ten accountants’ committing fraud, that the opportunity of committing fraud was a much more important factor in dete cting fraud and to take control of it. The motivation and rationalisation contributed less in this kind of accounting fraud cases. Question B2 Comment on the adequacy of the disciplinary action taken against Messina. (5 marks; approximately 500 words) Answer: Finally, Messina was fined for $7,500 and was suspended from doing accounting practice for two years. It is adequate but not enough punishment for Messina’s violation to the accounting standards according to the facts already known. After joining Livent, what Messina did in the Livent’s case of fraud went against the code of professional ethics, which discourages cheating and manipulations. Also, her behaviours broke the securities law in the United States, where the trial of Livent was held. Her involving in the fraud conflicted the interest of the public, especially the investors, who were unable to judge the real performance of Livent from their financial reports. Messina abused her authority in Livent and her influence on Deloitte, for the interest of her own and the executives at Livent. At the very beginning of joining Livent, Messina faced coercion and threats from Drabinsky to keep decent records by manipulation. However, she did not take positive action to resolving the conflict of interest between Drabinsky and herself. Proper ways when one faces conflict of interest is to  quit the job or decline to do the fraud. Messina could have turned to a confidential counselling firm for advice so that she did not have to get involved further in the fraud. On the one hand, it is enough punishment for her involvement in the fraud. She helped the accounting department at Livent to conceal the manipulation of financial statements. Also, as former partner at Deloitte, she abused her influence on the outside independent auditors to comb the financial reports of Livent before they filed to ensure the fraud undetected. What she did violated the standard professional codes for accountants and auditors, and thus she should be subject to penalty. According to the documents from Securities and Exchange Commission (1999), Messina was involved in discussion and approval of every manipulated records. She helped to hide these materials from the auditors so as not to be discovered the inflation in the company’s revenue. On the other hand, the SEC is conservative in judgement because of lack of evidence in proving Messina’s role in the fraud. First, it requires further investigation of the case to identify what she really did and her attitude in the fraud supported with evidence. Moreover, Messina, according to the case material, did show adversarial attitude toward Drabinsky’s fraud plan at first. It means that she still sticked to professional discipline in the beginning, though she yielded to Drabinsky’s bullying later. Also, Messina showed humble attitude in investigation and trial, and cooperated with the commission to investigate the case. It is adequate that the judges punished Messina both financially and professionally. She not only has to give back the illegal money she gained from the fraud, but also should be prevented from doing the practice until she can finally reflect on her mistakes before returning to the business as chief financial officer. However, the amount of fine is too little for Messina to realize her improper behaviours, considering the massive consequences of the fraud and the amount of money they benefited from manipulation. But the judgement should after all based on the evidences and regulations. The judge should take the good and bad things Messina had done  throughout the fraud into account to decide. Also, the punishment against Messina requires further investigation of her role in the fraud, which is disputable. References Coleman, J W 1987, ‘Toward an integrated theory of white-collar crime’, American Journal of Sociology, vol 93, no. 2, pp. 406-439. Dellaportas, S 2013, ‘Conversations with inmate accountants: Motivation, opportunity and the fraud triangle’, Accounting Forum, vol. 37, pp. 29-39. Elrod, H & Gorhum, M J, ‘Fraudulent financial reporting and cash flows’, Journal of Finance and Accountancy, vol. 11, pp. 56-61. Llopis, J, Gonzalez, M R & Gasco, J L 2007, ‘Corporate governance and organisational culture: The role of ethics officers’, International Journal of Disclosure and Governance, vol. 4, no. 2, pp. 96–105 Nwachukwu, S LS & Vitell, S J 1997, ‘The influence of corporate culture on managerial ethical judgments’, Journal of Business Ethics, vol. 16, no. 8, pp. 757-776. Schwartz, M S 2013, ‘Developing and sustaining an ethical corporate culture: The core elements’, Business Horizons, vol. 56, pp. 39-50. Securities and Exchange Commission, 1999, Securities and Exchange Commission versus Garth H. Drabinsky, Myron I. Gottlieb, Robert Topol, Gordon C. Eckstein, Maria M. Messina, Diane J. Winkefein, D. Grant Malcolm and Tony Fiorino, 99 CIV.0239, Litigation Release No. 16022, retrieved 15 Aug 2013, .

English Presentation Tourism Italy Essay

Good morning to Madam Teh and fellow classmates. Today, we would like to promote an affordable rate tourism package to Italy. We have made a research on The Most Popular Countries among Malaysians and we had Italy as the rank number one. So, that is why we decided to fulfill the people’s hunger to visit Italy and offer a low rate for the tourism package. The reason for people to pick Italy as their favorite country is mostly because of the sceneries. Italy, as we know has the most beautiful historic sceneries such as the churches, museums, historic sites and operas. If you think that Paris and Italy are almost the same, well, you are wrong about that one. Italy still has its historic auras better than Paris which has modern up a little bit. Back to the main point, the package included accommodations, transports, and food. So, you don’t have to worry. We will go from places to places by our tourism bus, sleeps in a very comfortable hotel and eat lots and lots of delicious food in Italy. You will fly with Air Asia on a 12 hours 31 minutes trip and land on the Fiumicino Airport in Fiumicino which is just 35 km away from Rome. Then, we will check in to your hotel, The Potrait Suites Hotel in Rome so you can rest and unpack your belongings in your rooms. After lunch at the hotel, we will bring you to some places in Rome. The first stop is The Church of San Luigi dei Francesi. It is one of the most visited churches in Rome. The uniqueness about this church is the interior and exterior designs and the tombs of the well-known French people in Italy. Then, we will go to the Coliseum. Everybody knows The Coliseum, right? It portrays the greatest works of Roman architecture and engineering. It is also known to be as the place for gladiators contest. We will be having dinner at the neighborhood of Trastevere. The neighborhood is known for its restaurants. Furthermore, the view of Trastevere at night is very pleasant. Other than that, we are also going to take you to Venice. Venice is the second attraction in Italy which is full of palaces and churches. We have the Palazzo and Musica A Palazzo. Palazzo or more specifically known as Palazzo Venezia is a very beautiful place for you to capture some photographs for memories. The palace is magnificently eye catching. After that, we stop by the Musica A Palazzo. We will let you experience watching  an original Italian soap opera in the one and only historic place, Musica A Palazzo. Then, we head to San Rocco, the historical church known to be the grave of a priest there. At night, we will bring you to the Grand Canal where you can have a water taxi experience. The views from the taxis are very breath taking at night. So, we will spend our nights in the taxis and after that have a walk in the streets near the canal where you can shop for souvenirs. The third attraction that we would love to offer you is Florence. Florence is known for the monuments, museums and religious buildings. First, we can visit the Bargello Museum which is the Florence government building. Next, we can visit other historical museums such as Museo Galileo, the science museum. Then, we can take some photographs at the Giotto Bell Tower. After that, we can stroll at the parks and street known as Piazza. The prices that we are offering are very affordable for everyone because the package includes accommodation, transport and breakfast. There are individual, family and group packages. For the individual package, we already set the nett price as low as RM2000. As for the family package which includes 2 adults and 2 children, is only for RM6000 nett price. The group package which has to be more than 8 persons will be at very low price for just RM1000 per person. Affordable, isn’t it? So, what are you waiting for? Get your passports ready and make your reservations now. We will be waiting for you to be a part of this amazing journey. Thank you.

What Is Racism All about Essay Example | Topics and Well Written Essays - 500 words

What Is Racism All about - Essay Example Africans were enslaved and heavily discriminated against during this period. This essay sheds light on the definition of racism and the types of racism. The belief that a specific race is superior to the other in terms of physical appearance, abilities and traits is viewed as racism. The Oxford English Dictionary states that racism is the ‘belief or ideology that members belonging to a certain race have features or certain skills that are specific to a certain race, setting them apart as being superior or inferior to the other race’ (Aarts, Chalker and Weiner 676). This definition is sufficient, however; it does not give a clear definition of what racism generally is. The UN does not give a clear definition of racism however, it defines racial discrimination is defined as: ‘shall mean any distinction, exclusion, restriction, or preference based on race, color, descent, or national or ethnic origin that has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other fie ld of public life’. (HR-Net Group).

Law and the Constitution in Canada Essay Example | Topics and Well Written Essays - 250 words - 2

Law and the Constitution in Canada - Essay Example In Canada, AG v. Canada Temperance Federation [1946] AC193, 2 DLR, provided for an exemplary display of judicial independence. During the case, the conflict to be resolved was a court suit challenging the Canadian Federation Act (CFA) was valid. In the ruling, the court declined the validity of the CFA1. The issue that brought conflict was the constitutionality of the Canadian Temperance Act. The concern of Peace, order, Good and Governance (POGG) became known. During the 4-2 majority ruling, the court further affirmed that the Act was within the legislative constitutionality competence of the parliament. Secondly, Johannesson v West St. Paul 1952 (SCC) portrayed judicial independence as an important recipe in restoring order to Municipality Acts2. During the case, the plaintiff argued that he wanted a designated place for his aerodromes. Under the Municipality Act had prohibited his aerodromes because of the noise they generate. However, the Supreme Court of Canada (SCC) by majority ruled that the issue was of a national importance and was within exclusive jurisdiction of the federal government under the POGG3. In addition, Russell v The Queen had declared the Canadian Temperance Act as constitutional when it was challenged at the SCC. Moreover, during the R. v. Crown Zellerbach Canada Ltd [1988] 1 S.C.R. 401, the SCC upheld the validity of the Ocean Dumping Act that today, form part of Canadian Environment Protection Act4. Despite coming to sharp criticism, the SCC and judicial independence have transcended the Canadian judicial system as the answer to conflicting definition and jurisdiction of the federal and provincial