Resume Padding

On Monday, May 7, Yahoo apologized to its employees for discrepancies about its CEO, hired in January. Apparently, Scott Thompson, does not have a computer science degree after all, even though that information was included in an SEC filing and in several public bios about him.

Questions:

1. If Thompson allowed false information about his educational background to linger in his bio, should he be treated just like any other employee who did the same? Discuss.
2. Why didn’t this issue come up in a background investigation of the CEO before he was hired? Discuss.
3. What should Thompson have done if it truly was an error? Discuss.
4. Look at the slide show regarding padded resumes (at http://www.washingtonpost.com/business/economy/yahoo-ceo-isnt-the-only-leader-who-has-fudged-resume/2012/05/10/gIQARucmFU_gallery.html?tid=ts_biz#photo=1) What one thing surprised you most in this slide show?

Sources:
McGregor, J. (2012). Yahoo’s CEO Scott Thompson’s Incorrect Resume Raises Questions for Tech Company’s Board. The Washington Post, May 8 (Retrievable at http://www.washingtonpost.com/blogs/post-leadership/post/yahoo-ceo-scott-thompsons-incorrect-resume-raises-questions-for-tech-companys-board/2011/04/01/gIQAXUB5AU_blog.html)

Staff (2012). Yahoo CEO Isn’t the Only Leader Who Has Fudged Resume – Slide Show. The Washington Post, May 10 (Retrievable online at http://www.washingtonpost.com/business/economy/yahoo-ceo-isnt-the-only-leader-who-has-fudged-resume/2012/05/10/gIQARucmFU_gallery.html?tid=ts_biz#photo=1

Bloomberg Video (2012). Will CFO Tim Morse Head Yahoo?, May 9.

Hospital Costs

Two years ago, Augie Hong, who works for an investment firm in San Francisco, awoke with severe abdominal pains. He went to an ER at the hospital closest to his house and was diagnosed with acute appendicitis. He wasn’t worried about the cost because he had health insurance from his employer. However, when he got the bill, it was $59,283, including $5,264 for the doctors. According to the Healthcare Blue Book, this amount was six times the fair price for his area.

Questions:

1. What is the range of fees for a routine appendectomy in California?
2. What was Mr. Hong’s mistake and what should he have done?
3. Under the Affordable Care Act, what are hospitals suppose to do by 2014?
4. What do experts advise consumers to do regarding hospital charges?

Source:

Rabin, R.C. (2012). The Confusion of Hospital Pricing. The New York Times, April 23 (Retrievable online at http://well.blogs.nytimes.com/2012/04/23/the-confusion-of-hospital-pricing/?ref=health)

Lunch Money Fraud

How low can you go? Otis Josey, a 54-year old Detroit man, allegedly told a pre-school girl that he worked at a radio station and was raising donations for a children’s hospital charity. In exchange for a donation, he would give the donor a gift card. Police say he literally cheated the 5-year old girl out of her $5 lunch money in exchange for a fake $20 gift card to Chuck E. Cheese.

Questions:

1. Read the article by Ray Martin. What is one of the most reported gift card scams?
2. What does Martin recommend that you should do with an unwanted gift card?
3. How do most companies recognize the revenue from gift cards? What journal entries are involved?

Sources:

NBC Video.(2012). Man accused of selling child fake Chuck E. Cheese gift card, NBC News, April 26 (Retrievable at http://video.msnbc.msn.com/nbc-news/47178295/#47178295)

Martin, R. (2011). Attention Shoppers: Avoid this Gift Card Scam. CBS News, December 15 (Retrievable online at http://www.cbsnews.com/8301-505145_162-57343690/attention-shoppers-avoid-this-gift-card-scam/)

Visit msnbc.com for breaking news, world news, and news about the economy

Budget Cut Alternatives?

For generations, community colleges have been seen as a low cost education for many. However, starting this summer, Santa Monica College is going to offer courses that are typically hard to enroll in (due to greater demand and the lack of student seats) at a premium price structure. This two-tiered price structure is raising concerns about the role and obligations of community colleges and unfair exclusion of the poorest students, which creates an imposed lower and upper class of students.

Questions:

1. Explain what has led to this idea. Do you think it is a good one? Why or why not?
2. What percentage increase would be applied to the more expensive courses?
3. If you were brainstorming about ideas to counteract budget cuts and avoid this two-tier system, what are some of the ideas you would suggest?

Source:

CNN.com Video. (2012). Students Pepper-Sprayed at Protest. April 4 (Retrievable online at www.cnn.com/video)

Medina, J. (2012). Two-year College, Squeezed, Sets 2-Tier Tuition, The New York Times,March 29 (Retrievable online at http://www.nytimes.com/2012/03/30/us/community-college-to-charge-more-for-top-courses.html?_r=1&hp)

People: The Number One Asset

What radical thinking! Cashiers barred from interacting with customers until they have completed 40 hours of training? Hundreds of staffers sent on trips around the U.S. and world to become experts in their products? No mandatory retirement age? Never laying off workers? All profits reinvested in the company or shared with employees? This is the Wegman model, as a $6.2 billion-a-year, 79-store-supermarket chain with cult-like loyalty among its customers.

Questions:

1. Can you buy shares of stock in Wegman? Discuss.
2. How many stores does the company open per year? Why?
3. Wegman’s vice-president says that “Our employees are our number one asset.” So where are employees listed on the financial statements? Discuss.

Source:
Rohde, D. (2012) The Anti-Wal-Mart: The Secret Sauce of Wegmans is People, The Atlantic, March 23 (Retrievable online at http://www.theatlantic.com/business/archive/2012/03/the-anti-walmart-the-secret-sauce-of-wegmans-is-people/254994/#.T3Eu451pn0M.mailto)

Christmas Cheer Backfires

Tyrone Newman decided to celebrate Christmas after he finally got a job and kept it for one year. Unfortunately, the Northeast Washington, D.C. maintenance man ended up spending his $1,500 mortgage payment on Christmas gifts. Not wanting to tell his wife that he had no way to pay the mortgage, he got several loans from a payday lender. Newman made $16.50 per hour at his job and whenever he tried to pay ahead on the loans, the lender discouraged him. His three $500 loans would cost $6,000 each if paid off in one year.

Questions:

1. Based on the amounts in the article, estimate whether it would be possible for him to pay off one $500 loan a year, if his expenses were $2,000 per month (using his salary only).
2. Discuss the legality of these types of loans. How was Newman able to get out from under the loans?
3. Look up the FTC case (www.ftc.gov) against payday loans in South Dakota and summarize the issues.
4. What are the journal entries that the payday lender would make for the 1st 2 months, assuming that Newman did not make a payment until month 3.

Source:

Dvorak, P. (2012). “Payday Loan Disaster: A Holiday Splurge Leads to a 651% interest rate,” The Washington Post, March 8 (Retrievable online at http://www.washingtonpost.com/local/payday-loan-disaster-a-holiday-splurge-leads-to-a-651percent-interest-rate/2012/03/08/gIQA9nMOzR_story.html?hpid=z3

Costs versus Benefits of a Marketing Campaign

Is it April Fool’s Day, yet? No, this really happened! The international marketing agency of BBH Labs recently outfitted 13 volunteer homeless shelter individuals as “human wireless transmitters” at the South by Southwest technology conference in Austin, Texas. The company provided the individuals with the devices, business cards and T-shirts listing their names followed by “a 4G Hotspot.” The homeless volunteers were told to go to the most densely packed areas of the conference to serve the large crowds that typically overwhelm cellular networks in the area. Each participant was paid $20 a day, plus any tips that conference goers donated in exchange for the wireless service. Needless to say, the marketing campaign has been criticized as “a darkly satirical science-fiction dystopia.”

Questions:
1. Do a cost/benefit analysis on this marketing campaign. What are the costs?
2. What are the benefits?
3. What are some of the qualitative issues about this strategy that you would include in a report about this marketing campaign? In your report, conclude with a recommendation.

Source:

Wortham, J. (2012). “Use of Homeless as Internet Hot Spots Backfires on Marketer,” The New York Times, March 12 (Retrievable online at http://www.nytimes.com/2012/03/13/technology/homeless-as-wi-fi-transmitters-creates-a-stir-in-austin.html?_r=1)

Can you say: Tapping a Swiss Bank account with Other People’s Money?

A Houston jury Tuesday convicted Texas financier R. Allen Stanford on all but one of the charges he faced for allegedly bilking investors out of more than $7 billion in one of the largest Ponzi schemes in U.S. history.

Questions:

1. Why, if Allen Stanford faces up to 20 years in prison for the most serious charges but could he be imprisoned for much longer?

2. How did Mr. Stanford separate the investors from their money and when did the government shut down the scheme?

3. What red flags of fraud were mentioned in the article?

Source:

MSNBC.com Staff. (2012). Jury convicts Stanford in $7 billion Ponzi scheme, March 6 (Retrievable online at http://www.msnbc.msn.com/id/46642425/ns/business-us_business/)

Visit msnbc.com for breaking news, world news, and news about the economy

Audit Irregularities

According to a report released on Feb. 15 in San Francisco county, about 400 recent foreclosures were determined to involve either legal violations or suspicious documentation.  This recent report suggests how pervasive foreclosure irregularities may be across the nation.

Questions:

1.  What is the acronym for the mortgage database that was started in 1995 to track information for lenders?

2.  What types of legal violations did the report indicate?

3.  Where did the greatest number of improprieties occur?  What internal controls could have prevented this?

Source:

Morgenson, G. (2012). Audit Uncovers Extensive Flaws in Foreclosures. The New York Times, Feb. 15 (Retrievable online at http://www.nytimes.com/2012/02/16/business/california-audit-finds-broad-irregularities-in-foreclosures.html?_r=2&hp)

 

The Judge Says So

Just days ago, it appeared that a hundred low-wage workers at a Walmart-contracted warehouse in California would lose their jobs after publicly accusing their employer of shorting them on pay and forcing them to work in harsh conditions. But after the workers argued that the layoffs amounted to illegal retaliation, a state judge ordered this week that the contractors keep the mostly immigrant workers employed at the warehouse.

Questions:

1. What was the name of the company that Wal-Mart contracted with?  What is a common name for this arrangement?
2. Why won’t Wal-Mart be included in the litigation regarding this situation?
3. Explain what type of journal entries Wal-Mart would make with respect to this arrangement.

Source:

Jamieson, D. (2012). Wal-Mart-Contracted Warehouse Jobs Saved By Judge, The Huffington Post, Feb. 3 (Retrievable online at http://www.huffingtonpost.com/2012/02/03/walmart-warehouse-workers-california_n_1253267.html?ref=business)

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