Enrons Ethical Dilemma - 1118 Words

Enrons Ethical Dilemma: Ethical and moral issues have received substantial focus in the modern society because of the recent cases in which huge corporations with big profits and earnings have faced bankruptcy. Enron is an example of corporations that have faced bankruptcy in the recent past because of the numerous problems it had with federal and state governments for manipulation of financial statements. While these problems are not only attributed to organizational issues, accounting firms are also blamed for such incidents. Enrons bankruptcy is mainly attributed to ethical and moral issues experienced by the firms management and leadership in relation to preparation of financial statements. Even though Enrons heydays have come to an ended, the ethical dilemma provides lessons that will last long in light of corporate values and ethical issues. Learning Objectives: Since Enrons ethical dilemma provides numerous lessons for the corporate world, especially with regards to corporate ethics and ethics, it also offers some learning objectives. The first learning objective for the case is to examine how leaders face moral and ethical dilemmas or issues i.e. lessons for corporate leaders and managers. Secondly, the case shows how systems thinking can be used to analyze organizational issues and develop appropriate solutions for the issues. Third, the case is used to demonstrate how questions can be used to stimulate thinking in order to address the underlying issue.Show MoreRelatedThe Rise and Fall of Energy Giant, Enron Essay1540 Words   |  7 PagesEnron scandal became notorious for violating ethical standards. There are several business motives involved in the rise and fall of Enron. In today’s world, adopting ethical standards is a must for a company to protect shareholder’s interest. 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Health Care Reform in the United States Essay - 987 Words

Health Care Reform in the United States In the United States, more than forty million people are without health insurance. Of these people, many are employed by firms that do not offer coverage and many others fall just below the poverty line. Many are poor but still do not qualify for Medicaid. At least twelve million of those without health insurance are children. Reliable sources indicate that the number of uninsured people could rise as high as sixty million by the year 2010. There is also a dilemma that the insured United States citizens face, that their healthcare system is sick, and everyone is aware of its illness: profit. In 2008, Malike Hassans, an HMO stockholdings CEO, salary was 166.4 million dollars. Most†¦show more content†¦Therefore, the physicians are not part of the decision making process involved in determining what services to provide. These rules can apply even when the patients life is at stake. Other terms prohibit the physician from disclosing how he or she is paid, especially when payment methods reward limiting referrals to patients. Why do HMOs want physicians to be less than honest with their patients? Because patients might demand care that would raise costs and reduce profits. According to Jeffrey Koplan, M.D., Patients should learn how to become active participants in their own healthcare, which means taking part in decisions involving diagnosis and treatment. Koplan is the president of Prudential Center for Health Care Research which conducts research to evaluate and improve how healthcare is delivered to managed care customers. If all insured citizens were more aware of the actions of their HMO, then there would be a decline in the immoral policies. Also, there are few American citizens who are striving for a real cure. The current fashion is to impose incremental reforms. For instance, Congress passed a new program to finance healthcare reforms for some uninsured children. They are also attempting to push bills to make it difficult for HMOs to deprive people of needed care. These bills are a much-needed step in the right direction. However, none of these reforms address the underlyingShow MoreRelatedHealth Care Reform : The United States Essay1087 Words   |  5 Pagesfeel heath care reform was necessary, health care costs affect the economy, the federal budget, and virtually every American’s family’s financial well-being. According to Obama, â€Å"In 2008, the United States devoted 16% of the economy to health care, an increase of almost one-quarter since 1998 (when 13% of the economy was spent on health care), yet much of that spending did not translate into better outcomes for patients† (Obama, 2016, p.526). 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The health care crisis and an understanding of the reforms The American Health Care system to say the least is wasteful, bloated, and generally inefficient and therefore in dire need for immediate review. This has largely been as a result of factors such as costs, poor investment return for outlays, inequitably distribution, and being based on anachronistic business model geared at treating diseases more than promoting wellness. The figures are all there to see why a radical surgery of the health

Corporate Accounting Financial Assessment for Accounts

Question: Discuss about the Corporate Accounting for Financial Assessment for Accounts. Answer: Qantas Airways Non-financial Assets The value regarding the non- financial assets is appropriately analyzed in the balance sheet in order to determine and evaluate there is any impairment present or not. Therefore, if there is impairment then it will help to estimate the recoverable amount of the asset. For intangible assets and goodwill, recoverable amount is calculated towards the end of the financial year. Therefore, assets regain able amount is greater than the fair value less sell costs. The assets help to increase flow of cash, for instance aircraft that are evaluated on the cash generating unit (Annual Report, 2016). The estimated flow of cash used to determine recoverable amount is discounted at the net present value using the discount rates that reflect an assessment of current market of time money value and risks specific to assets. The identification of CGU of the asset required judgment, and it requires determination of low aggregation of assets that helps to produce an independent flow of cash. The lowest assets aggregation gives augment to the CGUs as described by the AASB 136: mutilation of the assets are Qantas Domestic CGU, Qantas loyalty CGU, Qantas International CGU, Jetstar Group CGU and Qantas Freight CGU. Financial Assets The value regarding the financial assets seems to be evaluated at the reporting date for the purpose of determining whether there is any impairment. The financial assets are considered to be impaired if the objective shows that the event has negative impact on the estimated flow of cash of those assets. The impairment losses in the financial asset is estimated at the amortized costs is estimated as difference between the present value and carrying amount of estimated future flow of cash discounted at an effective rate of interest of the asset. Commonwealth Bank Provisions for the Impairment of Financial Assets The mutilation of the financial asset impairment arises, anywhere; the evidence is intention of the mutilation at a collective or individual basis, and an adequate amount to cover the credit related loss. The credit loss arises from the loans and also from the credit mechanisms such as guarantees, contingent liabilities, bank recognition and financial mechanisms. The provisions appraises are increased with presenting evidence objective of the mutilation. The provisions assessed are commonly made against the risk rate credit facility where there is a loss of amount $20,000. The provision is established primarily based on approximating the fair assessment of the guarantee taken and estimated as the dissimilarity between carrying amount of financial assets and present cost of the expected future flow of cash and discounted at original interest rate of the financial assets (Annual Report, 2016). The receivables and provision loan that do not have appraised provision individually are coll ectively appraised for the mutilation. The necessities are balanced in order to decrease carrying value of the portfolios of receivables and loans to the recoverable amounts at the balance sheet date. Therefore, the assessment process is subjected to the series of judgments and estimates. In the risk rating system, risk fragment including the default loss rates, default frequency, loss history and structure, diversity and size borrowers are considered. The current developments in the portfolios are reviewed. The management considered indicators of the portfolio performance, economic conditions, and quality. The change in estimates imposes a significant impact on the determined level of provision. 2. Impairment of Assets ensures that the assets of the companies are not carried more than the recoverable amount. The provision of Impairment of Qantas Airways and Commonwealth Bank align with the valuation role. The provision of impairment shows the actual value of the assets. Therefore, the assets of both the companies are carried out not more than recoverable amount. Mutilation loss is the benefit amount that surpasses the regain able amount. The impairment loss account of the companies shows the amount of assets exceeding its regain able amount. The actual cost of assets of Qantas Airways and Commonwealth Bank are shown in the financial report of companies (Holton, 2012). The profit and loss statement of both the companies shows the profit or loss of current accounting year which also helps to determine and evaluate the actual of the companies. The carrying amount is the amount at which the possessions are identified in the balance sheet after subtracting accumulated impairment los ses and accumulated depreciation. The superior the reasonable cost of the assets, least would be the discarding costs and its cost in use. Therefore, the financial statements should show the actual value of the assets. The financial statement of Qantas Airways and Commonwealth Bank shows the actual or fair value of the assets. Therefore at the closing stages of the accounting year, both the companies assess whether the assets can be impaired, and if the assets can be impaired, then the recoverable amount of the assets should be calculated. The provision for impairment shows the recoverable amount of the assets. The balance sheet of the companies shows the assets and liabilities of the current accounting year (Moles, 2011). The recoverable amounts of the assets are estimated annually and detailed calculation of the recoverable amount. The actual value of the assets is determined and evaluated as per the Australian accounting standard. The transportation amounts of non-financial posse ssions are appropriately evaluated at the financial statements to identify whether there is a sign of the mutilation. The assets are the one that helps to generate a flow of cash and are used to determine the recoverable amounts at their net present value. The transportation amounts of financial possessions are assessed at the reporting date and to decide whether they can be impaired or not. The impairment provision of the financial assets is raised with the objective of the damage at a cost to cover the acclaimed assess related losses. Therefore, the reasonable costs of the assets are calculated and are shown in the financial reports. Therefore, impairment of assets aligns with the role of valuation. References Annual Report, (2016). [online] Available at: https://www.qantas.com.au/infodetail/about/investors/2015AnnualReport.pdf Annual Report, (2016). [online] Available at: https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/annual-reports/cba-annual-report-30%20June-2015.pdf Holton, R. (2012).Global finance. Abingdon, Oxon: Routledge. Moles, P. (2011).Corporate finance. Hoboken, N.J.: Wiley.

Commonwealth vs Amann Pty Ltd †Free Samples to Students

Question: Discuss about the Commonwealth vs Amann Pty Ltd. Answer: Introduction: Amann Aviation Pvt. Ltd. was a company which signed a contract with the Commonwealth of Australia for the purpose of providing in-flight coastal surveillance for the next three years. It was mentioned in the contract that if the company will fail to perform as desired and in compliance with the conditions mentioned in the contract, the Commonwealth will have the power to provide a notice to the Amann Aviation to explain the reason behind its failure and to provide a reason to the Commonwealth and Management not to cancel the contract with the aviation company. In order to fulfill the contract, Amann aviation did a lot of expenditure and purchased aircraft also for this purpose(Swarb, 2015). Despite giving a good start to the work under contract, Amann aviation did not have sufficient number of aircrafts in order to fulfill the contract. When the time to fulfill the contract and to initiate the performance came, it was analyzed that Amann aviation was not in a condition to fulfill obligations relevant to the contract because of certain deficiencies in the aircraft. Due to this reason, the Commonwealth served a notice to the company to show cause behind its non-compliance with the contract. The allegation of Amann aviation was that the show-cause notice served by the Commonwealth was the denial of the contract and on this basis, Amann aviation terminated the contract with the commonwealth. The company sued Commonwealth for wrongful termination of the contract and required damages caused due to breach of contract done by Commonwealth with the company as Amann aviation had done a lot of expenditure in preparing aircraft for the fulfillment of the contract. Thus, for the purpose of legal issues, Amann aviation was the Plaintiff and Commonwealth was the Defendant(AustLII, 1991). Issues and Relevant law The courts are required to follow certain rules and regulations while awarding for the purpose of damages. In case of awarding damages for the purpose of a breach, which is also known as un-liquidated damages, the court considers various aspects. One of which is Compensation principle according to which, the court has to compensate the aggrieved party in such a manner so as to put it in the same position as it would be in the situation when no breach had occurred. For this purpose, there are three ways which are followed by the court i.e. expectation damages, reliance damages and loss of damages. In providing expectation damages, the court considers the benefit which has been received by the aggrieved party in case of fulfillment of the contract(Waugh, 2017). Thus, the compensation awarded in this case is the total sum which would have been received by the aggrieved party for which the contract was made. In case of considering reliance damages to be paid, the court assesses the damages on the basis of the costs suffered by the aggrieved party because an assessment of actual loss to the aggrieved party is impossible. In this condition, a court considers 'Loss of chance' as a form of compensation through which worthiness of the chance if provided to the aggrieved party to fulfill the contract is evaluated. It can also be done even in the conditions if the chance provided was based on the contingent conditions and are difficult to be assessed(Legal vision, 2015). It becomes the duty of the court in such a case to compensate the aggrieved party for the loss at least up to the extent that it has suffered in the preparation of the contract. Damages for the purpose of loss of chance is awarded when a contract is breached due to which the aggrieved party might have lost a beneficial opportunity. In this situation, the plaintiff is compensated for the purpose of losing an opportunity to achieve benefits which have monetary value and the assessment of the damages is also not possible. If the opportunity was based on contingent conditions management, then also, the plaintiff should be compensated for the damages incurred due to lost opportunities(Australian Contract Law, 2013). Arguments of the Parties and Analysis Amann aviation had appealed to the Full Court of the Federal Court that the company was entitled to receive higher compensation than that was awarded by the Federal Court and should not be provided only with one- half of the costs of damages caused due to wasted expenditure. On the other hand Commonwealth cross-appealed on the basis that judgment should be in its favor and if it is not possible, the compensation awarded to the company should be nominal only(Richardson Hadfield, 1999). It was stated that in a situation, where the aggrieved party has done a lot of expenditure for the purpose of fulfillment of the contract or for accomplishment of the desired performance, however, it is impossible to assess the value of the benefits which would have been received by the aggrieved party on the accomplishment of the performance by the defendant in accordance with the contract, it can be taken into the consideration of the justice that the aggrieved party should rely on an assumption that the worth of benefits received by the aggrieved party should at least be equal to the total loss which has been suffered by the aggrieved party or plaintiff in performing and taking the most possible actions which would have been practically essential for the procurement and performance of the contract(Winterton, 2017). The assumption of the damages to be compensated enables the recovery by the plaintiff which is in general, known as 'reliance damages', i.e. the damages equal to the lo ss of expenditure which has been rationally acquired on the basis of the assumption that the contractual assurance of the defendant would be honored. The presumption will be disproved if it is established that the plaintiff would not have derived any kind of financial benefits or other benefits through the performance of contract or any kind of financial or other kinds of benefits through future performances and would not have been sufficiently in value to compensate the expenditure done by the plaintiff. Moreover, even in a situation, in which it is established that the plaintiff would have acquired a loss, if the contract had been performed completely, reliance damages can be recovered with respect to the wasted expenditure to such an extent that the net expenditure incurred in past goes beyond the actual loss given, that to such an extent, the expenditure would have been recovered if the breach of contract had not taken place(Kuklik, 2016). The foundation of an award considering reliance damages is essential as a reaction to the denial or breach of contract, specifically to bring the plaintiff in the same situation with regard to the damages as if the denial or breach had not occurred within the contract. In the case of Commonwealth of Australia v Amann Aviation Pvt. Ltd (1991), Judges Chief Justice Mason CJ and Judge Dawson explained that the award of damages for the breach of contract defends the expectations of the plaintiff in case of receiving the benefits through the performance of the defendant and that expectation arises out and is created by the contract. Therefore, damages for the purpose of breach of contract are known as 'expectation damages'. Generally, during the regular business transactions, a party which supplies certain goods or services enters into a contract in order to gain profits(Mitchell Voon, 2000). Thus, expectation damages Management are usually expressed as the damages caused due to loss of profits. Judges pointed out that if the performance of a contract would have resulted in favor of the Plaintiff, while it does not provide profit, even then the recovering costs incurred due to the actions taken in the course of performing contractual obligations, the P laintiff would be entitled to recuperate the damages in a similar manner and up to the amount equal to the profits that would have been gained if the contract had been performed in a usual manner. In the conditions, in which it is not possible for the Plaintiff or the aggrieved party to exhibit that to what extent had the performance of the contract would have provided the profit to the Plaintiff, it will depend upon the Plaintiff to recover the expenditure incurred and the damages in such a case are known as reliance damages or damages caused due to the expenditure which was of no use after the breach of contract(Finnane, 2013). In this case, the respondents had signed a contract with the defendants i.e. Commonwealth to provide them with the air surveillance for three years. The Commonwealth wrongfully rebutted the contract for which Amann aviation sued it to compensate for the damages. Amann aviation was permissible to recover the damages which were assessed by mentioning its expenditure which was done on the project and later on wasted i.e. also known as reliance loss. However, it was analyzed that there was an opportunity with the Commonwealth to cancel the contract on the basis of available resources with the Amann aviation prior to the initiation of the preparation but the contract was rebutted long after the preparation started. The trial judges assessed the opportunity of the occurrence to be as 50% and reduced the amount of the compensation to be granted to Amman in accordance with the damages incurred by the company. However, the decision of the majority judges of the Full Court of the Federal Court concluded that there was only a 20% chance of cancellation of the contract as a result of which, Amann aviation should receive 80% of the compensation for the damages caused to waste of the expenditure done by the company for the fulfillment of the contract. The decision of the Full Court was confirmed on appeal to the High Court as well. Conclusion The decision of the judges was that reliance damages are a rough calculation of the expectation benefits. Reliance damages were considered by the court in this case because appropriate expected benefit was impossible to be assessed in this case. However, the trial judge had given a decision in favor of Amann aviation but the compensation assigned was fairly low due to which Amann appealed to the higher courts. Judge Beaumont of Federal Court delivered judgment in favor of Amann aviation and ordered the Commonwealth to pay one- half of the costs incurred by the company as the actual damage assessed by the court was $410,000. The judgment of the Full Court was also in favor of the Amann aviation and ordered the Commonwealth to pay the company a sum of $600,207 and to pay 90% of the costs incurred by Amann aviation of the proceedings in the trial court. It was affirmed by the court that in the case where a plaintiff has laid himself open to the expenditure either for fulfilling the contract or to accomplish its performance, however, it has become impossible or complicated to establish the assessment of benefits which has been received by the plaintiff would in case of performance of contract with the defendant, considerations regarding the justice state that the plaintiff might presume the value of those benefits should at least be equal to the total loss which has been or would have been incurred by the plaintiff in performing the duties which were reasonably essential for the purpose of acquiring and performing the contract. It can be explained in a manner that it is secured to presume that the expected benefit should at least cover all the expenses incurred by the aggrieved party in the preparations to fulfill the requirements of the contract. Therefore, at last, the decision was in favor of Amann aviation and the company was awarded the compensation of much higher amount as desired by the company. The appeal by the Commonwealth against the decision and the amount charged upon was dismissed. The decision of the court was on the basis of reliance damages because it was impossible to quantify a number of benefits which would have been achieved by Amman if the contract would have been continued in its original form. References AustLII, 1991. Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64 (12 December 1991). [Online] Available at: https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1991/54.html?stem=0synonyms=0query=title(commonwealth%20and%20amann%20aviation%20) [Accessed 26 April 2017]. Australian Contract Law, 2013. Commonwealth v Amann Pty Ltd. [Online] Available at: https://www.australiancontractlaw.com/cases/amann.html [Accessed 26 April 2017]. Finnane, E., 2013. Remedies, s.l.: Young Lawyers NSW. Kuklik, A., 2016. LAW OF CONTRACT. [Online] Available at: https://sydney.edu.au/lec/subjects/contracts/Winter%202016/LEC%20-%202016%20-%20Contract%20-%20Lecture%2011.pdf [Accessed 26 April 2017]. Legal vision, 2015. How do I calculate damages for breach of contract?. [Online] Available at: https://legalvision.com.au/how-do-i-calculate-damages-for-breach-of-contract/ [Accessed 26 August 2017]. Mitchell, A. D. Voon, T., 2000. Legal Research Manual. s.l.:LBC Information Services. Richardson, M. Hadfield, G. K., 1999. The Second Wave of Law and Economics. s.l.:Federation Press. Swarb, 2015. Commonwealth Of Australia V Amann Aviation Pty Ltd; HCA 12 DEC 1991. [Online] Available at: https://swarb.co.uk/commonwealth-of-australia-v-amann-aviation-pty-ltd-hca-12-dec-1991/ [Accessed 26 April 2017]. Waugh, G., 2017. Damages for Breach of Contract. [Online] Available at: https://dy1k0r3mpgvj5.cloudfront.net/files/COL/09166%20Damages%20-%20Waugh.pdf [Accessed 26 April 2017]. Winterton, D., 2017. Twenty five years on: re-examining Commonwealth v Amann Aviation Pty Ltd and the problem of pre-contractual expenditure. [Online] Available at: https://www.contracts.law.unsw.edu.au/node/76 [Accessed 26 April 2017].