I am studying the final right now and the last few chapters really emphasize SOX. SOX covers a lot – fraud, internal controls over financial reporting, management certification, whistleblowing, and more. I started my career in accounting at the same time that SOX was signed. We were the first wave of auditors to help implement SOX and that was 8 years ago. SOX 404 today does not look like what it did back then. SOX was birthed out of something so devastating and what measures were attempted to right the wrong and prevent the repeat of Enron were all with great intentions. As it has evolved over the years, there has been realization that some things were unnecessary/excessive while others have been very necessary. Internal controls over financial reporting is one such necessity but the methodology to test the controls has evolved through the years as well. Today, the efforts have been to integrate internal controls testing w/ substantive testing so that failure of one area would indicate a weakness for both. Coming into SOX today in my new job is neat because it helps me to see how far SOX has come and how essential it was.

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Winding Down

As we are heading into the last week of class, I am looking back and realized that we’ve met 20 times in the span of 3 months. I can’t believe how fast time has gone by and what seemed like would be forever away has finally arrived. I am glad to have taken this class b/c it has challenged me to consider a broader picture of ethics than just the journal entry or control activity. It also has challenged me to know that each of us are accountable for our actions, and the consequences can be huge. It only takes one person to bring down an entire corporation.

Going forward I will continue to be aware of ethical decisions to be made on a daily basis with each person I encounter. I’m thankful for the awareness and for the challenge to know more. IT’s propelling and it’s necessary.

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IFRS

Reading chapter 8 was very interesting. I graduated nearly 10 years ago and so I realized that so much has changed in that time. The way we do business has globalized and America, once a power house, is being normalized with the other countries around the world. It would make sense for accounting standards to change and to strive for a common set of rules for the world to abide by. THe ideal of such an accounting world seems really great, but with such complexity that exists in accounting as well as with some structures of business today, I wonder if it’s even feasible. I am always the skeptic, I suppose, but I think it’s great that there’s an effort being made to get there. It won’t be until 2015 that US will have to conform to IFRS but it will be here sooner than we know it. I”m glad I’m taking this class now to get a refresher course on very impacting changes such as IFRS.

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I have started my new job. Having started my new job, I think this class has helped me to really think about my job in with a renewed sense of awareness to ethics. It’s easy to trust and not question that accounting practices are done ethically and properly. However, this may or may not be the case and with a new job, it’s a good opportunity to have a fresh start to applying a skeptical and objective mind set.

So far, it’s been a great start and I am looking forward to a long career here.

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Ethical values are a very serious matter. Given this, it’s an area that is not given the proper attention and emphasis that it deserves. This is not just in accounting, but in almost all industries. Take for example the medical profession. Costs measures sometimes takes precedents over doing the right thing and at times, also one’s career is also placed before what is ethically correct. I wonder when we’ll get there. I wonder when it will be that we will able to reach a place where ethical standards will no longer be thought of as a theory, but can be a tangible reality that cannot be argued with. We, as a country, have come a long ways. But there is still yet more to do.

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An interesting ethical dilemma presented itself last week. I’m learning a lot through this interviewing process, and one of the things I’ve come to experience is that a right may not always translate to being ethical. We have laws of the land to protect us from harm, but being ethical goes beyond that. Being ethical has to be different than being in the right?

My ethical dilemma, in the grand scheme of things, is very small. In fact, some might argue that it’s not even an issue at all – but to me, it was. I think back on Kohlberg’s stages of ethical reasoning, and I”m not sure where this would fall under, but I think that my decisions are driven not just by the letter of the law but also by my faith. It was interesting getting different perspectives from different people, but I realize, in the end, only I will have to live the consequences. That’s why it’s important to be knowledgeable, and prepared to make the ‘right’ decision.

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Inherently Ethical?

If I were to be asked whether we are inherently incapable of being ethical, I would have to answer yes. A few weeks ago, we had a discussion in classon whether we were capable, and there were some points made that it would require positive or negative enforcement to ensure that ethical decisions were made. This proves to me that we cannot inherently make ethical decisions without being selfish. Though I understand Kohlberg’s different stages of ethical evaluation, I think that having reached a higher level of maturity in the ethical decision making process was a learned one; either through our upbringing, influences, and experiences. Had there never been any form of reinforcement, both positive and negative, I’d very assuredly state that we would all act in the interest of ourselvess.

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Recently, a lot of discussions I’ve been having w/ my friends and with co-workers have been around what type of managers are good to work for. I’ve worked for many managers and I’ve experienced a lot of styles. There are the micro-managers and those who are super macro in their management style. If the quintessential question is what is the better way, then the answer is not quite as easy as micro or macro. Micro managers can be tough to work for because they don’t allow much indepedence and can an air of mistrust. However, with macro management, one is able to be independent, but it may allow for mistakes to be missed.

While I’ve been interviewing, this question of what management type I would prefer has come up a lot. In my mind, I know the type of manager I would want to work for is someone who leads efficiently and purposefully. One that wants to lead by example, and lead by teaching. I have worked for some really good managers and some, not so good. In all this, I think it makes me think of what kind of leader I want to be. So as I answer the question of what manager is best, I know I have to some self-reflection to see what kind of manager I’ll grow to be.

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The cases that we did in class were really interesting. I think the case that really stuck out to me was the last group that presented on the parable of the Sadhu. I wasn’t quite sure if there was an ethical dilemma or whether it was a case on how to implement corporate culture. The way I understood the facts were that the group had a goal in mind to make it to the top of the mountain. They met an obstruction along the way and they each helped out the best they thought they could and continued on to reach their goal. One person within that group felt that they did not do enough and decided to stay behind. I think this can be seen as an ethical dilemma. However, I’m not sure if everyone would agree to that because they might aruge that they didn’t know if he was alive or not and they gave what they could. I think that if they had decided in the beginning to figure out a plan in case a situation like this would arise it might have turned out differently. They might have all decided that it would have been wrong to leave the sadhu behind. The corporate culture would have been determined and they would have had a common goal and purpose for which to adhere.

It is important to have a corporate culture that advanced ethics because the beliefs and actions that are set forth by a group is very easily adopted by others. I guess it can be thought of as a group-think mentality, which I can’t really say is right or wrong, but it’s a phenomenon that occurs, and because it does, it should be used in the right way.

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Interview Saga continues

The interview saga continues. I have interviewed with a publicly trading company this time, and again I began my interview preparation by reviewing the company website. Because the position is for SOX compliance, I spent some time reading through the investor relations links as well as the documents listed. Among the documents were related to corporate governance and compliance. As I read through the biography of each of the board of directors, I recalled the memories of having done this for past clients. It’s always really interesting to see the background of each of the board members. Most of them are from very prestigious schools and they have great experience. One thing that’s not mentioned in the bio’s is what they bring to the company that they serve. I’m always curious why an individual is selected because they have a huge responsibility and their pay is quite signficant. I read through their compensation as well as the compensation for the key members of senior management. One thing that struck me as very odd was the pay for the CFO. IT was very low, lower than my salary even. The stock compensation was substantial but it was comparable to the other members of senior management. It was curious to say the least. I also read through the code of ethics.

It’s interesting how much you can really gather about a company just by what you read on the website. If numbers don’t tell the whole story, then it’s worthwhile to read through all the information available on the company website as you can get a very good feel for the company’s standards on ethical values as well as their drive and motivation to run a business well.

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