Let the Punishment Fit the Crime

Posted by & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Statement Analysis, Fraud Accounting, Intermediate Accounting, Managerial Accounting.

The Mikado explains his ambition of letting the punishment fit the crime in Gilbert and Sullivan’s classic work. The Mikado’s song could be the new theme song of the Securities and Exchange Commission, if dissenting commissioners prevail. The debate over a “one size fits all” penalty for misconduct is at the heart of what defines… Read more »

Military Contracting Failures: A $1.5 Trillion Mistake

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The F-35 is being produced by 1,200 suppliers. Seen as the fighter jet of the future, it has trouble flying at night, its engines have exploded during takeoff, and early models suffered structural cracks. Questions: 1. Why is the military still pursuing the production of this pink elephant? Why doesn’t technology become less costly for… Read more »

Ouch! This may sting a little.

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According to the New York Times, officials are saying that short-term pain is necessary to put the European economy back on track. Regulators in the United States forced a similar catharsis on American banks in 2009, helping set the stage for the current recovery. Questions: 1. What was the result of the timid approach taken… Read more »

Impending Huge Penalties!

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The Kansas Supreme Court found that FedEx drivers were illegally misclassified as independent contractors from the late 1990s through 2011, despite being treated as employees. According to Alan Pyke, FedEx set contract agreements with delivery and pickup drivers in order to avoid the higher costs associated with making the drivers full employees. Questions: 1. What… Read more »

The Game is Rigged: Criminal Spoofing of the Market

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Federal prosecutors have filed the first-ever indictment of an individual financial professional for manipulating markets through high-speed trading. By using a Michael Coscia used the high-tech trading platform at a commodities trading company that he runs, Michael Coscia placed and then cancelled dozens of large purchases in less than a second. The result was that… Read more »

Dutch Treat?

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According to the New York Times, “Dutch pensions are scrupulously funded, unlike many United States plans, and are required to tally their liabilities with brutal honesty, using a method that is common in the financial-services industry but rejected by American public pension funds.” This article discusses the Dutch belief that each generation should pay its… Read more »

Should After-Work Screenings be Part of the Payroll?

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The nation’s retailers are paying close attention to the hotly contested issue before the Supreme Court this week. On Wednesday, the justices will determine whether security checks and the related waiting time should be part of an employee’s regular, compensable workday. Questions: 1. As part of the opposition of compensation for antitheft checks, retailers’ groups… Read more »

Trademarks Gone Wild

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A bitter legal battle is raging between a best-selling author and a management guru against America’s largest Greek yogurt manufacturer. For Chobani, it is a fight about an ambitious brand campaign and its straining process that is built around the phrase “How Matters.” For Dov Seidman, “How Matters” revolves around his business of helping companies… Read more »

Why Won’t My Car Start?

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Before many subprime borrowers drive their car off the lot, their car is equipped with a starter interrupt device, which allows lenders to remotely disable the ignition. This article and video highlight the problematic issues related to “electronic repossession.” Questions: 1. What percentage of car loans are estimated to be lending for subprime borrowers? 2…. Read more »

Ouch! Sometimes Consent Forms Hurt!

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According to the New York Times, an increasingly common practice used by hospitals is that some medical experts call drive-by doctoring assistants, consultants, and other hospital employees into cases and these incidents are charging patients or their insurers hefty fees. Most times patients do not realize these individuals have been involved or are charging until… Read more »