#worldcomics

[ecosdoporao]

Sua estratégia de comunicação está atendendo às necessidades de mudança?

Foto por fauxels em Pexels.com Todos sabemos que os últimos dois anos foram um período de mudanças sem precedentes. Embora em alguns países a pandemia possa estar entrando em um período mais calmo, muitas das mudanças econômicas e sociais subjacentes significam que as comunicações devem ser constantemente revisadas e avaliadas.  De acordo com o Worldcom Confidence Index (WCI), Diversidade,…

[mostlysignssomeportents]

What kind of bubble is AI?

My latest column for Locus Magazine is "What Kind of Bubble is AI?" All economic bubbles are hugely destructive, but some of them leave behind wreckage that can be salvaged for useful purposes, while others leave nothing behind but ashes:

https://locusmag.com/2023/12/commentary-cory-doctorow-what-kind-of-bubble-is-ai/

Think about some 21st century bubbles. The dotcom bubble was a terrible tragedy, one that drained the coffers of pension funds and other institutional investors and wiped out retail investors who were gulled by Superbowl Ads. But there was a lot left behind after the dotcoms were wiped out: cheap servers, office furniture and space, but far more importantly, a generation of young people who'd been trained as web makers, leaving nontechnical degree programs to learn HTML, perl and python. This created a whole cohort of technologists from non-technical backgrounds, a first in technological history. Many of these people became the vanguard of a more inclusive and humane tech development movement, and they were able to make interesting and useful services and products in an environment where raw materials – compute, bandwidth, space and talent – were available at firesale prices.

Contrast this with the crypto bubble. It, too, destroyed the fortunes of institutional and individual investors through fraud and Superbowl Ads. It, too, lured in nontechnical people to learn esoteric disciplines at investor expense. But apart from a smattering of Rust programmers, the main residue of crypto is bad digital art and worse Austrian economics.

Or think of Worldcom vs Enron. Both bubbles were built on pure fraud, but Enron's fraud left nothing behind but a string of suspicious deaths. By contrast, Worldcom's fraud was a Big Store con that required laying a ton of fiber that is still in the ground to this day, and is being bought and used at pennies on the dollar.

AI is definitely a bubble. As I write in the column, if you fly into SFO and rent a car and drive north to San Francisco or south to Silicon Valley, every single billboard is advertising an "AI" startup, many of which are not even using anything that can be remotely characterized as AI. That's amazing, considering what a meaningless buzzword AI already is.

So which kind of bubble is AI? When it pops, will something useful be left behind, or will it go away altogether? To be sure, there's a legion of technologists who are learning Tensorflow and Pytorch. These nominally open source tools are bound, respectively, to Google and Facebook's AI environments:

https://pluralistic.net/2023/08/18/openwashing/#you-keep-using-that-word-i-do-not-think-it-means-what-you-think-it-means

But if those environments go away, those programming skills become a lot less useful. Live, large-scale Big Tech AI projects are shockingly expensive to run. Some of their costs are fixed – collecting, labeling and processing training data – but the running costs for each query are prodigious. There's a massive primary energy bill for the servers, a nearly as large energy bill for the chillers, and a titanic wage bill for the specialized technical staff involved.

Once investor subsidies dry up, will the real-world, non-hyperbolic applications for AI be enough to cover these running costs? AI applications can be plotted on a 2X2 grid whose axes are "value" (how much customers will pay for them) and "risk tolerance" (how perfect the product needs to be).

Charging teenaged D&D players $10 month for an image generator that creates epic illustrations of their characters fighting monsters is low value and very risk tolerant (teenagers aren't overly worried about six-fingered swordspeople with three pupils in each eye). Charging scammy spamfarms $500/month for a text generator that spits out dull, search-algorithm-pleasing narratives to appear over recipes is likewise low-value and highly risk tolerant (your customer doesn't care if the text is nonsense). Charging visually impaired people $100 month for an app that plays a text-to-speech description of anything they point their cameras at is low-value and moderately risk tolerant ("that's your blue shirt" when it's green is not a big deal, while "the street is safe to cross" when it's not is a much bigger one).

Morganstanley doesn't talk about the trillions the AI industry will be worth some day because of these applications. These are just spinoffs from the main event, a collection of extremely high-value applications. Think of self-driving cars or radiology bots that analyze chest x-rays and characterize masses as cancerous or noncancerous.

These are high value – but only if they are also risk-tolerant. The pitch for self-driving cars is "fire most drivers and replace them with 'humans in the loop' who intervene at critical junctures." That's the risk-tolerant version of self-driving cars, and it's a failure. More than $100b has been incinerated chasing self-driving cars, and cars are nowhere near driving themselves:

https://pluralistic.net/2022/10/09/herbies-revenge/#100-billion-here-100-billion-there-pretty-soon-youre-talking-real-money

Quite the reverse, in fact. Cruise was just forced to quit the field after one of their cars maimed a woman – a pedestrian who had not opted into being part of a high-risk AI experiment – and dragged her body 20 feet through the streets of San Francisco. Afterwards, it emerged that Cruise had replaced the single low-waged driver who would normally be paid to operate a taxi with 1.5 high-waged skilled technicians who remotely oversaw each of its vehicles:

https://www.nytimes.com/2023/11/03/technology/cruise-general-motors-self-driving-cars.html

The self-driving pitch isn't that your car will correct your own human errors (like an alarm that sounds when you activate your turn signal while someone is in your blind-spot). Self-driving isn't about using automation to augment human skill – it's about replacing humans. There's no business case for spending hundreds of billions on better safety systems for cars (there's a human case for it, though!). The only way the price-tag justifies itself is if paid drivers can be fired and replaced with software that costs less than their wages.

What about radiologists? Radiologists certainly make mistakes from time to time, and if there's a computer vision system that makes different mistakes than the sort that humans make, they could be a cheap way of generating second opinions that trigger re-examination by a human radiologist. But no AI investor thinks their return will come from selling hospitals that reduce the number of X-rays each radiologist processes every day, as a second-opinion-generating system would. Rather, the value of AI radiologists comes from firing most of your human radiologists and replacing them with software whose judgments are cursorily double-checked by a human whose "automation blindness" will turn them into an OK-button-mashing automaton:

https://pluralistic.net/2023/08/23/automation-blindness/#humans-in-the-loop

The profit-generating pitch for high-value AI applications lies in creating "reverse centaurs": humans who serve as appendages for automation that operates at a speed and scale that is unrelated to the capacity or needs of the worker:

https://pluralistic.net/2022/04/17/revenge-of-the-chickenized-reverse-centaurs/

But unless these high-value applications are intrinsically risk-tolerant, they are poor candidates for automation. Cruise was able to nonconsensually enlist the population of San Francisco in an experimental murderbot development program thanks to the vast sums of money sloshing around the industry. Some of this money funds the inevitabilist narrative that self-driving cars are coming, it's only a matter of when, not if, and so SF had better get in the autonomous vehicle or get run over by the forces of history.

Once the bubble pops (all bubbles pop), AI applications will have to rise or fall on their actual merits, not their promise. The odds are stacked against the long-term survival of high-value, risk-intolerant AI applications.

The problem for AI is that while there are a lot of risk-tolerant applications, they're almost all low-value; while nearly all the high-value applications are risk-intolerant. Once AI has to be profitable – once investors withdraw their subsidies from money-losing ventures – the risk-tolerant applications need to be sufficient to run those tremendously expensive servers in those brutally expensive data-centers tended by exceptionally expensive technical workers.

If they aren't, then the business case for running those servers goes away, and so do the servers – and so do all those risk-tolerant, low-value applications. It doesn't matter if helping blind people make sense of their surroundings is socially beneficial. It doesn't matter if teenaged gamers love their epic character art. It doesn't even matter how horny scammers are for generating AI nonsense SEO websites:

https://twitter.com/jakezward/status/1728032634037567509

These applications are all riding on the coattails of the big AI models that are being built and operated at a loss in order to be profitable. If they remain unprofitable long enough, the private sector will no longer pay to operate them.

Now, there are smaller models, models that stand alone and run on commodity hardware. These would persist even after the AI bubble bursts, because most of their costs are setup costs that have already been borne by the well-funded companies who created them. These models are limited, of course, though the communities that have formed around them have pushed those limits in surprising ways, far beyond their original manufacturers' beliefs about their capacity. These communities will continue to push those limits for as long as they find the models useful.

These standalone, "toy" models are derived from the big models, though. When the AI bubble bursts and the private sector no longer subsidizes mass-scale model creation, it will cease to spin out more sophisticated models that run on commodity hardware (it's possible that Federated learning and other techniques for spreading out the work of making large-scale models will fill the gap).

So what kind of bubble is the AI bubble? What will we salvage from its wreckage? Perhaps the communities who've invested in becoming experts in Pytorch and Tensorflow will wrestle them away from their corporate masters and make them generally useful. Certainly, a lot of people will have gained skills in applying statistical techniques.

But there will also be a lot of unsalvageable wreckage. As big AI models get integrated into the processes of the productive economy, AI becomes a source of systemic risk. The only thing worse than having an automated process that is rendered dangerous or erratic based on AI integration is to have that process fail entirely because the AI suddenly disappeared, a collapse that is too precipitous for former AI customers to engineer a soft landing for their systems.

This is a blind spot in our policymakers debates about AI. The smart policymakers are asking questions about fairness, algorithmic bias, and fraud. The foolish policymakers are ensnared in fantasies about "AI safety," AKA "Will the chatbot become a superintelligence that turns the whole human race into paperclips?"

https://pluralistic.net/2023/11/27/10-types-of-people/#taking-up-a-lot-of-space

But no one is asking, "What will we do if" – when – "the AI bubble pops and most of this stuff disappears overnight?"

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/12/19/bubblenomics/#pop

Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg

CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en

--

tom_bullock (modified) https://www.flickr.com/photos/tombullock/25173469495/

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/

[darkmaga-retard]

This article reveals systemic corruption and prioritization of profit over people in modern businesses, paralleling how governments, seen as corporate entities, exploit and neglect their citizens.

Gaz

Aug 07, 2024

"The Corporation" is a documentary where a significant portion of content addresses corporate malfeasance. It challenges the metaphor of "bad apples" to describe unethical behavior within corporations, arguing that the issue is not just a few individuals but a systemic problem ingrained in the corporate structure itself. The film critically examines this pervasive issue, demonstrating how the prioritization of profit over social responsibility leads to widespread harm and ethical breaches.

The film posits that the fundamental design and mandate of corporations inherently drive them to prioritize profit maximization over social responsibility. This priority is embedded in the legal and operational frameworks of corporations, which are structured to serve the interests of shareholders above all else. This shareholder primacy model obligates corporate managers to focus on increasing shareholder value, often leading to decisions that can be detrimental to employees, communities, and the environment.

Several case studies and real-world examples are presented to illustrate how this profit-driven mandate results in widespread harm. The documentary highlights notorious corporate scandals, such as those involving Enron, Worldcom, and Arthur Andersen, to demonstrate that these incidents are not isolated but rather symptomatic of a deeper, systemic problem. The film suggests that these corporations, driven by the imperative to deliver ever-increasing profits, engaged in fraudulent and unethical practices that ultimately led to catastrophic consequences for their stakeholders and society at large.

[chungledown-bimothy]

25 YEARS FOR SAM BANKMAN-FRIED!!

For comparison, the Enron and WorldCom CEOs got 24 and 25 years, respectively. I honestly think this was the realistic best case scenario, and I'm so glad that this didn't end up being another example of serious white collar crimes getting just a slap on the wrist.

[mariacallous]

The collapse of FTX, the world’s second largest crypto-exchange, raises major questions about the viability of cryptocurrency and the state of America’s financial regulatory system. While the debate on whether FTX’s collapse means crypto should be more regulated or kept further out of the regulatory safety net rages, we must ensure that those who might have broken the law at FTX be aggressively prosecuted. Failure to prosecute individuals who broke the law is a key lesson from the last financial crisis that we must not forget as we enter the crypto crisis.

It’s clear that the 2008 global financial crisis continues to shape reaction to what some are calling crypto’s ‘Lehman Brothers’ moment. However, the more accurate analogies for FTX are the massive corporate frauds such as Enron, Tyco, and MCI WorldCom. These firms cooked their books as it seems likely that FTX did. FTX’s misdeeds appear more akin to Bernie Maddoff’s ponzi scheme and MF Global’s illegal use of customer money to fund their own speculative investments.

For those who argue that more regulation of crypto would have prevented FTX’s implosion, recall that MF Global, Lehman Brothers, and Bear Sterns were all regulated by the Securities and Exchange Commission (SEC). Similarly, Bernie Madoff who ran the largest ponzi scheme at the time in American history was well known to regulators, having served as Chairman of the NASDAQ stock exchange. FTX was not exactly out of America’s financial regulatory system either, it was licensed and registered with the Commodities Future Trading Commission (CFTC). There is no guarantee that had FTX been more closely regulated it would not have stolen customer funds like MF Global or potentially run a ponzi scheme like Madoff. Ultimately, regulation alone cannot stop people from acting illegally and unethically. Laws define what is illegal but law enforcement is required to catch and prosecute criminals.

Congress’s decision to hold hearings to uncover facts, expose wrongdoing, and amass evidence for prosecution is the right first step. These hearings will likely uncover more misfeasance in the crypto space. Potential domino contagion within crypto is quite possible, witness another crypto exchange BlockFi halting redemptions in the wake of FTX’s collapse. When consumer confidence is shaken, investors will run. The lack of regulatory safeguards and transparency into other crypto exchanges and currencies could mean that FTX is not the last or even the largest player to fail. Recall after Enron went MCIWorldComm, after Lehman went AIG.

How should the government respond? Enron executives went to jail. So did Bernie Madoff. However, almost no bank executives were personally prosecuted after the financial crisis, despite widespread misconduct. This was a major mistake in ensuring greater public confidence and accountability in how our financial system operates.

FTX is a critical opportunity for the government to get it right. Even if prosecution is more challenging because crypto’s status under the law is unclear and FTX was operating through multiple offshore enterprises, it is critical that the government use every mechanism possible to ensure personal accountability when illegal activity takes place and investors have their money stolen. One reason given during the financial crisis for the lack of prosecution was that prosecutors were afraid of losing cases. It is far better for the public to see the government attempt and fail prosecution than to not try at all. If the laws are insufficient to convict, then failed prosecutions will help build political support to change the law.

Will Congress act to regulate crypto? There had been growing bipartisan support for draft legislation on stablecoins and for crypto exchanges. Those proposals need to be fundamentally rethought in the wake of FTX’s implosion. Many on the left and right want to keep cryptocurrencies out of the regulatory system. FTX’s implosion can justify keeping crypto out of the regulated system just as it can be argued that its implosion means regulation is more urgently needed.

Crypto remains in the netherworld of financial regulation, caught between traditional definitions of securities, commodities, assets, money, and payments. As former CFTC Chairman Tim Massad pointed out the problems of our regulatory system’s fragmentation back in 2019, writing that while both the Securities and Exchange Commission and the CFTC have: “some authority over crypto-assets, neither has sufficient jurisdiction, nor do they together.” Although crypto exploded in popularity between Massad’s paper and FTX’s implosion, new regulatory authority was not given to either agency. Federal bank regulators generally tried to keep crypto out of the regulatory system, which so far seems to have limited the contagion from FTX’s implosion to the broader financial system. New York’s financial regulator never gave FTX the license necessary to operate in the Empire State, a decision that saved New Yorkers a lot of money. Sometimes the right answer by a regulator is no.

Congress should not rush to regulate crypto, nor treat the industry with a broad brush assuming all crypto is as corrupt as FTX appears to have been. As legislators take the time necessary to figure out what the right regulatory system is, prosecutors need to step up. Americans lost a lot of money in FTX, just as they did in many other large corporations that broke the law. People need to be held accountable to restore faith in the system. Let’s do a better job this time than in 2008.

[lboogie1906]

Clifford Leopold Alexander Jr. (September 21, 1933 - July 1, 2020) was an adviser to presidents, the first African American secretary of the Army, and a former chairman of the EEOC. He was born in New York City, he was the son of Clifford L. and Edith Alexander. He received a BA, cum laude, from Harvard University and an L.L.B. from Yale University Law School. He became Assistant District Attorney for New York County. He was executive director of the Manhattanville Hamilton Grange Neighborhood Conservation Project.

He left the private practice of law in New York City to become a Foreign Affairs Officer in the National Security Council in DC. President Lyndon B. Johnson appointed him Special Assistant to the President; then, Associate Special Counsel and Deputy Special Counsel to the President. He was named a special representative of the president, with the rank of ambassador. In this capacity, he led the US delegation to ceremonies marking the independence of Swaziland. He returned to the private practice of law.

President Jimmy Carter selected him as secretary of the Army in 1977, the first African American to occupy this position. As secretary of the Army, he was chief of administration, training, operations, logistical support, and preparedness for the Department of the Army and controlled a budget of more than $33 billion.

He founded a consulting firm, Alexander & Associates, Inc. The firm consulted with a variety of Fortune 500 companies, including Major League Baseball, on the effective recruitment and promotion of minorities and women. He has served on the board of directors for American Home Products Corporation, MCI Worldcom, IMS Health, and Mutual of America. He has been a member of the Board of Governors for the American Stock Exchange.

When Dun & Bradstreet Corporation’s CEO retired, he was chosen by the corporation to temporarily oversee the operations of the 1.97 billion dollar company as well as oversee the search for a permanent CEO.

He is survived by his wife, Adele Logan; his son and his daughter; and seven grandchildren. #africanhistory365 #africanexcellence #omegapsiphi

[kawtar0007]

أهمية الأخلاقيات والضوابط الداخلية في حماية الشركات: دراسة حالة شركة WorldCom

[recentlyheardcom]

The Importance of Protecting Whistleblowers

Creator Timothy L. Miles Revealed December 10, 2023 Phrase rely 553 The Significance of Defending Whistleblowers Within the aftermath of the worldwide monetary disaster and company scandals akin to Enron and WorldCom, regulators have positioned a better emphasis on incentivizing staff to report cases of company misconduct. Consequently, there was a major improve in whistleblower packages…

[brookstonalmanac]

Events 9.14 (after 1940)

1940 – Ip massacre: The Hungarian Army, supported by local Hungarians, kill 158 Romanian civilians in Ip, Sălaj, a village in Northern Transylvania, an act of ethnic cleansing. 1943 – World War II: The Wehrmacht starts a three-day retaliatory operation targeting several Greek villages in the region of Viannos, whose death toll would eventually exceed 500 persons. 1944 – World War II: Maastricht becomes the first Dutch city to be liberated by allied forces. 1948 – The Indian Army captures the city of Aurangabad as part of Operation Polo. 1954 – In a top secret nuclear test, a Soviet Tu-4 bomber drops a 40 kiloton atomic weapon just north of Totskoye village. 1958 – The first two German post-war rockets, designed by the German engineer Ernst Mohr, reach the upper atmosphere. 1960 – The Organization of Petroleum Exporting Countries (OPEC) is founded. 1960 – Congo Crisis: Mobutu Sese Seko seizes power in a military coup, suspending parliament and the constitution. 1975 – The first American saint, Elizabeth Ann Seton, is canonized by Pope Paul VI. 1979 – Afghan leader Nur Muhammad Taraki is assassinated upon the order of Hafizullah Amin, who becomes the new General Secretary of the People's Democratic Party. 1982 – President-elect of Lebanon Bachir Gemayel is assassinated. 1984 – Joe Kittinger becomes the first person to fly a gas balloon alone across the Atlantic Ocean. 1985 – Penang Bridge, the longest bridge in Malaysia, connecting the island of Penang to the mainland, opens to traffic. 1989 – The Standard Gravure shooting where Joseph T. Wesbecker, a 47-year-old pressman, killed eight people and injured 12 people at his former workplace, Standard Gravure, before committing suicide. 1992 – The Constitutional Court of Bosnia and Herzegovina declares the breakaway Croatian Republic of Herzeg-Bosnia to be illegal. 1993 – Lufthansa Flight 2904, an Airbus A320, crashes into an embankment after overshooting the runway at Okęcie International Airport (now Warsaw Chopin Airport), killing two people. 1994 – The rest of the Major League Baseball season is canceled because of a strike. 1997 – Eighty-one killed as five bogies of the Ahmedabad–Howrah Express plunge into a river in Bilaspur district of Madhya Pradesh, India. 1998 – Telecommunications companies MCI Communications and WorldCom complete their $37 billion merger to form MCI WorldCom. 1999 – Kiribati, Nauru and Tonga join the United Nations. 2000 – Microsoft releases Windows Me. 2001 – Historic National Prayer Service held at Washington National Cathedral for victims of the September 11 attacks. A similar service is held in Canada on Parliament Hill, the largest vigil ever held in the nation's capital. 2002 – Total Linhas Aéreas Flight 5561 crashes near Paranapanema, Brazil, killing both pilots on board. 2003 – In a referendum, Estonia approves joining the European Union. 2003 – Bissau-Guinean President Kumba Ialá is ousted from power in a bloodless military coup led by General Veríssimo Correia Seabra. 2007 – Financial crisis of 2007–2008: The Northern Rock bank experiences the first bank run in the United Kingdom in 150 years. 2008 – Aeroflot Flight 821, a Boeing 737-500, crashes into a section of the Trans-Siberian Railway while on approach to Perm International Airport, in Perm, Russia, killing all 88 people on board. 2015 – The first observation of gravitational waves is made, announced by the LIGO and Virgo collaborations on 11 February 2016. 2019 – Yemen's Houthi rebels claim responsibility for an attack on Saudi Arabian oil facilities. 2022 – Death of Queen Elizabeth II: The Queen's coffin is taken from Buckingham Palace, placed on a gun carriage of The King's Troop Royal Horse Artillery and moved in a procession to Westminster Hall for her lying in state over the next four days with the queue of mourners stretching for miles along the River Thames.

[cpeinc]

Ethics and Accountancy: Cases that Rocked the Industry and the World

A once famous actor said that there were only two people he had on instant dial: his lawyer and his accountant. Now that story may ring false, but it is true that in the world, our lives and fiances depend a lot on these professionals.

And when one of them fails to follow the Code of Conduct and Ethics that is part of their profession, it’s not just the client that suffers. Basically, everyone involved is affected when there are ethics and conduct violations in accounting and finance.

It’s no surprise that this makes Ethics CPE for accountants a valuable and required component of their professional careers. Continuing professional education credits are part of a CPA’s ongoing continuing education requirement, with Ethics as a state requirement they cannot skip.

When accountants violate their Code of Conduct, the ramifications affect the finances of companies and private individuals. Moreover, it erodes the public trust in professionals and the institutions they work for.

Here are some of the biggest cases of fraud in accountancy that shook the economies of the world.

The Lehman Brothers

The repurchase agreement that almost destroyed the country, the global financial services firm hid $50 billion loans as sales for the firm. The frim used a loophole in the system, allowing the sale of toxic assets to offshore banks in the Cayman Islands.

These unethical practices were revealed in 2008, when Lehman Brothers filed for bankruptcy. Their clients were soon transferred to other broker-dealers, while thousands of people lost their jobs, further putting the economy in a dangerous tailspin.

The Madoff Ponzi Scheme

The Bernie Madoff Investment Securities tricked investors of more than $64.8 billion in a Ponzi scheme that used investors’ money to pay returns to themselves or other investors. Madoff was sentenced to 160 years, while many of his investors were left penniless and robbed of their life savings.

Enron

In 2001 Enron was an energy and utility company that soon joined in energy trading, which allowed them to bet on the future prices of energy sources. However, it was soon revealed by a whistleblower that the company hid huge debts in their books, and that it had been losing money to almost $74 billion.

This resulted in the closure of the energy giant, and thousands of investors and employees lost retirement accounts and employment. Many of their overseas partners also closed too, resulting in many more workers losing jobs.

WorldCom

This was an accounting scandal that began when the company fraudulently inflated their assets to billions of dollars. The CEO committed a failure in accurate financial reporting, resulting in using costs as capital and adding fraudulent entries that inflated their revenues.

The company’s internal auditing discovered the fraud, with accounts that reached $3.8 billion in value. This resulted in a WorldCom filing for bankruptcy, with more than 30,000 people losing their jobs and investors losing more than $180 billion.

Ethics in Accounting Matters

Continuous learning is imperative for finance professionals, especially when it comes to Ethics. These cases are often studied and assessed to complete CPA Ethics and CPE credits requirements, but also give accountants and professionals a deeper understanding why following a strict Code of Conduct matters. For financial professionals interested in taking online CPE courses for ethics, CPE Inc. is the best place to go. They offer a wide range of Ethics course options, so visit cpeonline.com to earn your CPE credits with ethics as a focus.

For more in formation about Continuing Professional Education Cpa and CPE Course please visit:- CPE Inc.

[norteenlinea]

Worldcom OOH recibe certificaciones Bipoc y dei para promover la diversidad y la inclusión en el lugar de trabajo

http://dlvr.it/T9xBwr

[waybackwanderer]

undefined

WorldCom Investor Relations Center Jan 1998 Archived Web Page

[upcomingtradera]

[dan6085]

Listing 20 financial scandals with detailed information for each would be extensive, but I can provide brief information on a few significant ones along with their auditors and impact on corporate governance:

1. **Enron Scandal (2001):**

- **Details:** Enron's collapse was due to accounting fraud and corporate misconduct. Executives manipulated financial statements to hide debt.

- **Auditors:** Arthur Andersen.

- **Effect on Corporate Governance:** Led to the implementation of the Sarbanes-Oxley Act, emphasizing accountability and transparency.

2. **WorldCom Scandal (2002):**

- **Details:** WorldCom engaged in accounting fraud by inflating profits through improper accounting entries.

- **Auditors:** Arthur Andersen.

- **Effect on Corporate Governance:** Contributed to the creation of the Sarbanes-Oxley Act, emphasizing internal controls and accountability.

3. **Bernie Madoff Ponzi Scheme (2008):**

- **Details:** Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding investors of billions of dollars.

- **Auditors:** Friehling & Horowitz.

- **Effect on Corporate Governance:** Raised awareness about the importance of due diligence in investment management and regulatory oversight.

4. **Lehman Brothers Bankruptcy (2008):**

- **Details:** Lehman Brothers filed for bankruptcy after engaging in risky financial practices and concealing debt.

- **Auditors:** Ernst & Young.

- **Effect on Corporate Governance:** Contributed to reforms and discussions around risk management, accountability, and financial regulation.

5. **Parmalat Scandal (2003):**

- **Details:** Parmalat, an Italian dairy and food company, collapsed due to accounting irregularities and a massive fraud scheme.

- **Auditors:** Grant Thornton.

- **Effect on Corporate Governance:** Resulted in increased scrutiny of financial reporting and auditing standards.

6. **Tyco International Scandal (2002):**

- **Details:** Tyco's executives engaged in corporate fraud, embezzlement, and unauthorized compensation.

- **Auditors:** PricewaterhouseCoopers (PwC).

- **Effect on Corporate Governance:** Prompted reforms in executive compensation and increased emphasis on board oversight.

7. **Satyam Computer Services Scandal (2009):**

- **Details:** Satyam's founder inflated profits and fabricated assets, leading to a massive accounting fraud.

- **Auditors:** PricewaterhouseCoopers (PwC).

- **Effect on Corporate Governance:** Resulted in increased scrutiny of corporate governance practices in India.

8. **Adelphia Communications Scandal (2002):**

- **Details:** Adelphia executives engaged in corporate fraud by hiding debt and stealing company funds.

- **Auditors:** Deloitte & Touche.

- **Effect on Corporate Governance:** Emphasized the need for greater transparency and accountability in corporate financial reporting.

9. **HealthSouth Scandal (2003):**

- **Details:** HealthSouth inflated earnings by nearly $3 billion through accounting fraud.

- **Auditors:** Ernst & Young.

- **Effect on Corporate Governance:** Increased scrutiny on corporate governance practices, particularly in the healthcare sector.

10. **Barings Bank Collapse (1995):**

- **Details:** Nick Leeson's unauthorized trading led to the collapse of Barings Bank.

- **Auditors:** Deloitte & Touche.

- **Effect on Corporate Governance:** Raised awareness about the need for risk management and internal controls.

11. **Sunbeam Corporation Scandal (2001):**

- **Details:** Sunbeam's executives engaged in accounting fraud, inflating revenues and concealing losses.

- **Auditors:** Arthur Andersen.

- **Effect on Corporate Governance:** Highlighted the importance of ethical leadership and financial transparency.

12. **Royal Ahold Scandal (2003):**

- **Details:** Ahold overstated earnings by billions through accounting irregularities.

- **Auditors:** Deloitte & Touche.

- **Effect on Corporate Governance:** Resulted in increased focus on internal controls and international accounting standards.

13. **Freddie Mac and Fannie Mae Crisis (2008):**

- **Details:** Both mortgage giants faced accounting scandals, contributing to the global financial crisis.

- **Auditors:** Various, including PricewaterhouseCoopers (PwC).

- **Effect on Corporate Governance:** Sparked discussions on regulatory oversight in the housing finance sector.

14. **Long-Term Capital Management (LTCM) Crisis (1998):**

- **Details:** LTCM's risky investment strategies led to a financial crisis requiring a bailout.

- **Auditors:** Ernst & Young.

- **Effect on Corporate Governance:** Emphasized the need for transparency and risk management in financial institutions.

15. **Washington Mutual (WaMu) Failure (2008):**

- **Details:** WaMu's collapse was fueled by risky lending practices and a failure in risk management.

- **Auditors:** Deloitte & Touche.

- **Effect on Corporate Governance:** Contributed to discussions on financial institution regulation and risk assessment.

16. **Wells Fargo Account Scandal (2016):**

- **Details:** Wells Fargo employees opened unauthorized accounts to meet sales targets.

- **Auditors:** KPMG.

- **Effect on Corporate Governance:** Raised concerns about ethical conduct and oversight in the banking sector.

17. **Bank of Credit and Commerce International (BCCI) Scandal (1991):**

- **Details:** BCCI engaged in money laundering, fraud, and other illegal activities, leading to its closure.

- **Auditors:** Price Waterhouse.

- **Effect on Corporate Governance:** Resulted in increased international efforts to combat money laundering and financial fraud.

18. **National Australia Bank (NAB) Foreign Currency Options Scandal (2004):**

- **Details:** NAB incurred substantial losses due to unauthorized trading in foreign currency options.

- **Auditors:** KPMG.

- **Effect on Corporate Governance:** Highlighted the importance of risk management and internal controls in financial institutions.

19. **Halifax Bank of Scotland (HBOS) Collapse (2008):**

- **Details:** HBOS faced a collapse due to aggressive lending practices and inadequate risk management.

- **Auditors:** KPMG.

- **Effect on Corporate Governance:** Led to discussions on regulatory oversight and risk assessment in the banking industry.

20. **Japan's Olympus Corporation Scandal (2011):**

- **Details:** Olympus executives engaged in a cover-up of investment losses through accounting fraud.

- **Auditors:** Ernst & Young ShinNihon.

- **Effect on Corporate Governance:** Raised concerns about transparency and corporate governance practices in Japanese companies.

These financial scandals underscore the importance of ethical conduct, transparency, and robust corporate governance practices to maintain trust in financial institutions and markets. These scandals had far-reaching consequences, influencing regulatory reforms, changes in auditing practices, and increased emphasis on corporate governance to prevent similar financial misconduct in the future.

[financeaccountingus]

Sarbanes Oxley Act 2002 Unleashed: Navigating US Accounting Regulations with Ease.

Sarbanes Oxley Act 2002 Unleashed: Navigating US Accounting Regulations with Ease.

Unleash the power of Sarbanes Oxley Act 2002! Our guide takes you on a journey through US Accounting Regulations, providing clarity and practical insights for seamless compliance.

In the intricate tapestry of U.S. accounting regulation, the Sarbanes Oxley Act (SOX) stands as a defining thread, woven to address the systemic vulnerabilities exposed by corporate malfeasance in the early 2000s. This legislation, named after its architects Senator Paul Sarbanes and Representative Michael Oxley, represents a paradigm shift in the governance and transparency landscape. It is also known as Public Company Accounting Reform and Investor Protection Act in Senate and Corporate and Auditing Responsibility and Transparency Act in House of Representatives but it is more commonly known as Sarbanes Oxley Act or SOX or Sarbox.  Let’s embark on a detailed exploration of the Sarbanes Oxley Act, examining its historical context, core provisions, and its profound impact on corporate governance, financial reporting, and the global regulatory milieu.

Introduction

1. The Genesis of Sarbanes Oxley Act

The Sarbanes Oxley Act, born out of the crucible of corporate scandals, emerged as a legislative beacon in 2002. Its genesis lies in the corporate implosions of Enron and WorldCom, seismic events that eroded public trust and underscored the imperative for a robust regulatory framework. Other scandals included Tyco International, Adelphia, Peregrine Systems. Sarbanes Oxley Act crystallized as a response, a legislative apparatus crafted to restore integrity, accountability, and investor confidence.

2. The Regulatory Epoch: Sarbanes Oxley Act’s Lasting Significance

To fathom the significance of Sarbanes Oxley, one must transcend its role as a reactive measure. It heralded a new regulatory epoch, where the onus on corporate responsibility and governance took center stage. This act became synonymous with a higher standard of transparency, not merely as a legal obligation but as an ethical imperative in the corporate domain. The Sarbanes Oxley Act contain 11 sections and it is required by Security and Exchange Commission (SEC) for implementing the rulings and ensure the compliance with the law.

Section 1. Historical Context

1.1. The Corporate Landscape Pre-SOX

The pre-Sarbanes Oxley corporate landscape was characterized by unchecked corporate power, obscured financial dealings, and a glaring absence of regulatory teeth. Corporations wielded influence with minimal oversight, paving the way for unscrupulous practices that compromised the very foundation of shareholder trust.

Auditors Conflict of Interest:

Before the formation of Sarbanes Oxley 2002 the main “watchdogs” for investors were auditor and they were self-regulated instead of government regulated. They provided many management consultancy services to the companies along with the auditing services. Their management consultancy services were far more lucrative and attractive than the auditing services as per their agreements. So this create a conflict of interest for auditor because in audit observation challenging the companies accounting and reporting approach greatly damage the client relationship with the auditors.

Boardroom Failure:

Before enactment of Sarbanes Oxley Act 2002 board members who were responsible for oversighting the complete procedure of accounting and reporting on the behalf of investors were exposed. The financial scandals expose those board members who did not have any expertise and performed their responsibilities regarding the transparent reporting. The most important part of the board failure was that the audit committees were not truly independent of the management or board members.

Security Analysts Conflict of Interest:

Security analyst provide recommendations to investors for buying and selling of the securities and investment bankers provide loans to the companies and manage merger and acquisition process. This also create a conflict of interest because on one hand they provided recommendation on the specific buying and selling of security to investors and on other hand they provided the lucrative credit and loan facilities to the companies.

Low Budget of the SEC:

Before the formation of Sarbanes Oxley Act 2002, the budget of SEC was low but after the implementation of Sarbanes Oxley Act 2002 the budget of SEC increase nearly double and help SEC to strictly regulate and implement the Sarbanes Oxley Act 2002 to save investors from further fraudulent behaviors of companies.

Fraudulent Banking Practices:

The inappropriate practices of banking to issued loan to the companies were the main cause of bad debts. The investors of the banks were really hurt by such loans because they considered the issuance of loans to these companies as a signal of their good financial health. This resulted in paying the heavy price by huge amount of payments settlement by banks. This also rise the questions on the bank’s willingness to issuance of loans to these collapse companies and criteria on which these banks issued loans to the companies involved in financial fraud.

1.2. Catalysts for Reform: Enron and WorldCom

The implosion of Enron and WorldCom, emblematic of corporate hubris and financial deceit, served as catalysts for regulatory reform. The fraudulent machinations within these corporate behemoths revealed regulatory loopholes and a dire need for legislation that could anticipate and thwart such malfeasance. After its enactment President George W. Bush stated that “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt. The era of low standards and false profits is over; no boardroom in America is above or beyond the law.”

This act also led to the formation of another quasi-public agency named as Public Company Accounting Oversight Board or PCAOB. This agency duty was to overseeing, regulating, inspecting and disciplining accounting firms in their role as auditors of the public companies. Sarbanes Oxley Act 2002 required the PCAOB to check the internal and external independence of the auditors for the first time in the history. PCAOB has four main duties to perform regarding the auditors of public companies and that are registration, inspection, standard setting and enforcement.

Section 2. Objectives of Sarbanes Oxley Act

2.1. Fortifying Corporate Governance

At its core, Sarbanes Oxley Act 2002 aspires to fortify corporate governance, redefining the responsibilities of executives and board members. By mandating a majority of independent directors on audit committees, the act aims to mitigate conflicts of interest, fostering a governance ethos grounded in transparency and accountability.

2.2. The Imperative of Financial Transparency

Sarbanes Oxley Act 2002 sets forth an unambiguous mandate for financial transparency, elevating it from a desirable attribute to an absolute imperative. Section 404, in particular, compels companies to scrutinize and disclose the effectiveness of their internal controls, ensuring that financial data is not only accurate but also fortified against potential manipulation.

2.3. Safeguarding Investor Interests

Investors, the lifeblood of financial markets, occupy a paramount position in the Sarbanes Oxley Act narrative. The act functions as a bulwark against corporate malfeasance, imposing stringent penalties for fraudulent activities and misrepresentation. It transforms the corporate landscape into a terrain where investor interests are safeguarded with unwavering resolve.

Section 3: Structure of Sarbanes Oxley Act 2022

Title 1: Public Company Accounting Oversight Board.

Establishment; administrative provisions.

Registration with the board.

Auditing, quality control, and independence standards and rules.

Inspection of registered public accounting firms.

Investigation and disciplinary proceedings.

Foreign public accounting firms.

Commission oversight of the board.

Accounting standards.

Funding.

Title 2: Corporate Responsibility.

Services outside the scope of practice of auditors.

Preapproval requirements.

Audit partner rotation.

Auditor reports to audit committees.

Conforming amendments.

Conflicts of interest.

Study of mandatory rotation of registered public accounting firms.

Commission Authority.

Considerations by appropriate State regulatory authorities.

Title 3: Corporate Responsibility.

Public company audit committee.

Corporate responsibility for financial reports.

Improper influence on conduct of audits.

Forfeiture of certain bonuses and profits.

Officer and director bars and penalties.

Insiders trades during pension funds blackout periods.

Rules of professional responsibility for attorneys.

Fair funds for investors.

Title 4: Enhanced Financial Disclosures.

Disclosures in periodic reports.

Enhanced conflict of interest provisions.

Disclosures to transactions involving management and principal stock holders.

Management assessment of internal controls.

Exemption.

Code of ethics for senior financial officers.

Disclosure of audit committee financial expert.

Enhanced review of periodic disclosures by issuers.

Real time issuer disclosure.

Title 5: Analyst Conflict of Interest.

Treatment of securities analysts by registered securities associations and national securities exchange.

Title 6: Commission Resources and Authority.

Authorization of appropriations.

Appearance and practice before commission.

Federal court authority to impose penny stock bars.

Qualifications of associated persons of brokers and dealers.

Title 7: Studies and Reports.

GAO study and report regarding consolidation of public accounting firms.

Commission study and report regarding credit rating agencies.

Study and report on violators and violations.

Study of enforcement actions.

Study of investment banks.

Title 8: Corporate and Criminal Fraud Accountability

Short title.

Criminal penalties for altering documents.

Debts nondischargeable if incurred in violation of securities fraud laws.

Statute of limitations for securities fraud.

Review of Federal Sentencing Guidelines for obstruction of justice and extensive criminal fraud.

Protection for employees of publicly traded companies who provided evidence of fraud.

Criminal penalties for defrauding shareholders of publicly traded companies.

Title 9: White Collar Crime Penalty Enhancements.

Short title.

Attempts and conspiracies to commit fraud offenses.

Criminal penalties for mail and wire fraud.

Criminal penalties for violations of Employees Retirement Income Security Act of 1974.

Amendment to sentencing guidelines relating to certain white-collar offenses.

Corporate responsibility for financial reports.

Title 10: Corporate Tax Returns.

Sense of the Senate regarding the signing of corporate tax return by chief executive officers.

Title 11: Corporate Fraud and Accountability.

Short title.

Tampering with a record or otherwise impeding an official proceeding.

Temporary freeze authority for the Securities and Exchange Commission.

Amendment to the Federal Sentencing Guidelines.

Authority of the commission to prohibit persons from serving as officers or directors.

Increased criminal penalties under Securities Exchange Act of 1934.

Retaliation against informants.

The irony of Sarbanes-Oxley is that what the SEC now demands is what good executives have been asking for all along. Gwen Thomas Editor /Columnist

Section 4. Key Provisions

4.1. Section 302: Corporate Responsibility for Financial Reports

The fulcrum of executive accountability, Section 302 of Sarbanes Oxley Act 2002 mandates that key corporate officers—typically the CEO and CFO—personally vouch for the accuracy and completeness of financial reports. This provision introduces a pivotal layer of responsibility, aligning executive actions with the financial health of the organization and assuring stakeholders of their commitment to accuracy. In other words, senior corporate executives and officers certify in writing that the company’s financial statements are true, transparent and material in all respect. Officers who signed the financial reports were subject to criminal penalties and imprisonment in case of not fully comply with SEC requirements.

The requirement is that the officers must assess the effectiveness of the company’s internal controls within 90 days prior to the report and include their conclusions about the effectiveness of those internal controls in the report, based on their evaluation as of that specific date.

Certainly! The responsibility of external auditors extends beyond just expressing an opinion on the accuracy of financial statements. External auditors are also required to evaluate and provide an opinion on the effectiveness of internal control over financial reporting maintained by management.

In the past, there was an additional requirement for auditors to issue a third opinion specifically related to management’s assessment of internal control. However, this requirement was removed in 2007.

Currently, external auditors focus on two main opinions:

4.1.1. Financial Statements Opinion: Auditors assess whether the financial statements present a true and fair view of the company’s financial position and performance in accordance with the applicable financial reporting framework.

4.1.2 Internal Control over Financial Reporting Opinion: Auditors evaluate and express an opinion on the effectiveness of internal control over financial reporting. This involves assessing the processes and safeguards put in place by management to ensure the reliability of financial reporting and the safeguarding of assets.

The removal of the third opinion regarding management’s assessment simplifies the reporting process, but it doesn’t diminish the importance of auditors’ scrutiny over both financial statements and internal controls. The goal is to provide stakeholders with assurance about the reliability of financial information and the effectiveness of the internal control environment.

4.2. Section 303: Improper Influence on the Conduct of Audits

This Section of Sarbanes Oxley Act 2002 appears to be an excerpt from securities or financial regulations, specifically addressing the unlawful actions of individuals associated with an issuer (presumably a company) in relation to the auditing process. Let me break down the key points:

4.2.1. Prohibited Actions:

Individuals Prohibited: The rules prohibit officers or directors of an issuer, or any person acting under their direction, from taking certain actions.

Prohibited Actions: It is unlawful for these individuals to fraudulently influence, coerce, manipulate, or mislead any independent public or certified accountant who is conducting an audit of the financial statements of the issuer.

Purpose of Prohibition: The aim is to prevent any actions that could lead to the financial statements being materially misleading.

4.2.2. Regulatory Authority:

Rulemaking Authority: The passage mentions that the Securities Exchange Commission has the authority to prescribe rules and regulations deemed necessary and appropriate in the public interest or for the protection of investors.

Enforcement: In any civil proceeding, the Commission has exclusive authority to enforce the rules outlined in this section, as well as any rules or regulations issued under this section.

In summary, this excerpt establishes regulations aimed at maintaining the integrity of financial statements by preventing fraudulent actions during the auditing process. The regulatory body (the Commission) is granted the authority to create and enforce rules in this regard.

4.3. Section 401: Disclosures in Periodic Reports (Off-Balance Sheet Items).

This section of Sarbanes Oxley Act 2002 discusses the attention drawn to off-balance sheet instruments, particularly in the context of Enron’s bankruptcy and Lehman Brothers’ use of a specific instrument, “Repo 105,” during the 2010 court examiner’s review of the Lehman Brothers bankruptcy. It also mentions the response to these incidents through the Sarbanes Oxley Act 2002.

4.3.1. Enron’s Impact:

Enron’s Bankruptcy: The bankruptcy of Enron brought attention to the fraudulent use of off-balance sheet instruments. Enron had engaged in deceptive practices involving such instruments.

4.3.2. Lehman Brothers and Repo 105:

Lehman Brothers’ Bankruptcy: The review of Lehman Brothers’ bankruptcy in 2010 highlighted the use of “Repo 105,” an off-balance sheet instrument. Lehman allegedly used this instrument to shift assets and debt off-balance sheet, presenting a more favorable financial position to investors.

4.3.3. Sarbanes–Oxley Response:

Disclosure Requirement: Sarbanes–Oxley mandated the disclosure of all material off-balance sheet items. This was a response to the deceptive practices observed in Enron and Lehman Brothers cases.

SEC Study: The legislation also required the Securities and Exchange Commission (SEC) to conduct a study and report on the extent of usage of such off-balance sheet instruments and whether accounting principles adequately addressed them.

SEC Report: The SEC’s report was issued on June 15, 2005, shedding light on the prevalence and nature of off-balance sheet instruments.

4.3.4. Regulatory Response and Critics:

Interim Guidance: In May 2006, the SEC issued interim guidance on off-balance sheet instruments, which was later finalized. This indicated a regulatory response to address the issues raised.

Critics’ Concerns: Despite these efforts, critics argued that the SEC did not take sufficient steps to regulate and monitor the use of off-balance sheet instruments, suggesting potential gaps in oversight.

4.4. Section 404: Internal Controls and Management Assessment

Section 404 of Sarbanes Oxley Act 2002 casts a discerning eye on internal controls, an often-overlooked linchpin of financial integrity. It necessitates companies to evaluate and publicly disclose the effectiveness of their internal controls over financial reporting. This provision not only fortifies the financial infrastructure but also instills confidence in stakeholders about the robustness of the company’s control mechanisms. This section imposes requirements on management and external auditors regarding the assessment and reporting of the adequacy of a company’s internal control on financial reporting (ICFR).

4.4.1. Section 404 of Sarbanes Oxley Act 2002:

Reporting Requirement: Section 404 of Sarbanes Oxley Act 2002 mandates that both management and external auditors report on the adequacy of the company’s ICFR.

Costly Implementation: It is noted that this section of Sarbanes Oxley Act 2002 is considered the most costly aspect of the legislation for companies to implement. The effort required to document and test important financial manual and automated controls is substantial.

4.4.2. Management’s Responsibilities under Section 404:

Internal Control Report: Management is required to produce an “internal control report” as part of each annual Exchange Act report.

Affirmation of Responsibility: The report must affirm the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting.

Assessment of Effectiveness: The report must also contain an assessment, as of the end of the most recent fiscal year, of the effectiveness of the internal control structure and procedures for financial reporting.

4.4.3. Use of Internal Control Frameworks:

Adoption of Frameworks: To fulfill the assessment requirement, managers typically adopt an internal control framework, such as the one described in the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In summary, Section 404 of the Sarbanes Oxley Act focuses on the reporting and assessment of a company’s internal controls on financial reporting. The requirements placed on management involve producing an internal control report, affirming responsibility, and assessing the effectiveness of internal control structures and procedures. This section is acknowledged as particularly costly for companies due to the extensive efforts required for documentation and testing.

4.5. Section 802: Criminal Penalties for Document Tampering

Section 802 (a) of Sarbanes Oxley Act 2002 stated that “Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.”

Recognizing the sanctity of financial documentation, Section 802 imposes criminal penalties for tampering, altering, or destroying records with the intent to obstruct federal investigations. This provision underscores the legal repercussions for compromising the integrity of financial records, serving as a deterrent against any attempts to manipulate critical documents.

4.6. Section 806: Civil Action to Protect Against Retaliation in Fraud Case i.e. Criminal Penalties for Defrauding Shareholders of Publicly Traded Companies

Section 806 of the Sarbanes Oxley Act (SOX), commonly known as the whistleblower-protection provision. This section aims to prevent retaliation against individuals who disclose potential or actual violations related to specific categories of misconduct within publicly traded companies.

4.6.1. Whistleblower Protection:

Covered Individuals: Section 806 of Sarbanes Oxley Act applies to a range of individuals associated with publicly traded companies, including officers, employees, contractors, subcontractors, or agents.

Prohibited Retaliation: It explicitly prohibits these individuals from retaliating against an employee who discloses reasonably perceived potential or actual violations falling under six enumerated categories of protected conduct.

4.6.2. Enumerated Categories of Protected Conduct:

Securities Fraud

Shareholder Fraud

Bank Fraud

Violation of SEC Rule or Regulation

Mail Fraud

Wire Fraud

4.6.3. Prohibited Retaliatory Actions:

Broad Range: Section 806 of Sarbanes Oxley Act prohibits a broad range of adverse employment actions as retaliation against whistleblowers. This includes actions such as discharging, demoting, suspending, threatening, harassing, or any other form of discrimination.

4.6.4. Notable Court Decision:

Protection against “Outing”: A federal court of appeals ruled that merely “outing” or disclosing the identity of a whistleblower is considered actionable retaliation. This underscores the importance of safeguarding the confidentiality and protection of individuals who report misconduct.

In summary, Section 806 of the Sarbanes Oxley Act establishes whistleblower protection for individuals associated with publicly traded companies. It prohibits retaliation against employees who disclose potential or actual violations falling within specified categories of protected conduct. The section is designed to encourage individuals to report wrongdoing without fear of adverse consequences, and recent legal decisions emphasize the significance of maintaining the confidentiality of whistleblowers.

4.7. Section 906: Corporate Responsibility for Financial Reports (Continued)

Complementing Section 302, Section 906 of Sarbanes Oxley Act 2002 imposes criminal penalties for corporate officers who willfully certify false financial statements. This dual-layered approach reinforces the gravity of providing accurate financial information, ensuring that executives bear personal consequences for any intentional misrepresentation.

If found guilty than those who certified the financial statements and report not willfully shall be fine of not more than $10,00,000 and imprisonment not more than 10 years or both and those who certified the financial statements and reports willfully shall be fine of not more than $500,000 and imprisonment not more than 20 years given to these officers.

Section 5. Impact on Corporate Governance

5.1. Transformation of Board Composition

Sarbanes Oxley brought about a transformation in the composition of corporate boards, particularly audit committees. The Sarbanes Oxley Act 2002 mandated a majority of independent directors on audit committees, reducing the influence of company insiders. This shift aimed to enhance the objectivity of board oversight, mitigate potential conflicts of interest, and foster an environment conducive to effective governance.

5.2. Enhanced Role of Audit Committees

Audit committees, traditionally tasked with overseeing financial reporting and external audits, assumed a more prominent role under Sarbanes Oxley. The Sarbanes Oxley Act 2002 mandated that these committees be comprised solely of independent directors, reinforcing their independence and objectivity. Audit committees became instrumental in safeguarding the integrity of financial disclosures and ensuring compliance with regulatory standards.

5.3. Evaluation of the Effectiveness of Corporate Governance Reforms

The effectiveness of corporate governance reforms introduced by Sarbanes Oxley remains a subject of ongoing evaluation. Proponents argue that these reforms have instilled greater accountability, transparency, and ethical conduct in corporate practices. Independent board oversight, strengthened by the Sarbanes Oxley Act 2002, is seen as a crucial component in preventing corporate misconduct and protecting shareholder interests.

Section 6. Financial Transparency and Reporting

6.1. Influence of Sarbanes Oxley on External Auditors

Sarbanes Oxley redefined the relationship between companies and their external auditors. The Sarbanes Oxley Act 2002 imposed restrictions on the provision of certain non-audit services to audit clients, aiming to preserve the independence and objectivity of external audits. This separation was deemed critical for ensuring that auditors could objectively evaluate and report on a company’s financial statements without any conflicts of interest.

6.2. Imperative of Accurate Financial Reporting

Accurate financial reporting became a central focus of Sarbanes Oxley. By holding corporate officers personally accountable for the accuracy of financial statements, the Sarbanes Oxley Act 2002 aimed to provide investors with reliable information for making informed decisions. This emphasis on accuracy not only contributed to the overall integrity of financial markets but also served as a deterrent against fraudulent reporting practices.

6.3. Case Studies Illustrating Improved Transparency and Disclosure

Examining case studies of companies that embraced Sarbanes Oxley reveals instances where improved transparency positively impacted financial reporting. Organizations that approached compliance not just as a regulatory requirement but as an opportunity to strengthen internal controls and governance structures reaped long-term benefits. These case studies serve as illustrations of how a commitment to transparency can enhance corporate reputation and investor trust.

Section 7. Compliance Challenges

7.1. Initial Hurdles Faced by Companies in Implementing Sarbanes Oxley

The implementation of Sarbanes Oxley Act 2002 presented initial challenges for companies, particularly in understanding and adapting to new regulatory requirements. Compliance with Section 404 of Sarbanes Oxley Act 2002, in particular, demanded substantial documentation and testing of internal controls, leading to concerns about the cost-effectiveness of the reforms. Companies struggled to strike a balance between meeting regulatory expectations and maintaining operational efficiency.

7.2. Evolution of Compliance Standards Over Time

Over time, the business landscape adapted to the new compliance standards introduced by Sarbanes Oxley. Companies invested in technology-driven solutions to streamline compliance processes, reducing the burden of manual documentation and testing. Regulatory authorities also provided guidance to help businesses navigate the complexities of compliance, contributing to the evolution of standardized and more efficient compliance practices.

Section 8. International Influence

8.1. Sarbanes Oxley’s Impact on Global Accounting Standards

Sarbanes Oxley’s influence extended far beyond U.S. borders, shaping global accounting standards. The Sarbanes Oxley Act 2002 served as a model for other nations grappling with corporate governance issues, prompting international entities to re-evaluate and strengthen their own regulatory frameworks. The emphasis on transparency, accountability, and investor protection set a global standard for ethical business practices.

8.2. Comparative Analysis with International Regulatory Frameworks

Conducting a comparative analysis of Sarbanes Oxley with international regulatory frameworks reveals both commonalities and differences. While many countries adopted measures inspired by Sarbanes Oxley, variations exist based on legal traditions, corporate structures, and cultural nuances. Understanding these differences is crucial for ongoing discussions about the global harmonization of accounting standards.

Section 9. Criticisms and Controversies

9.1. Debate on the Effectiveness vs. Burdensomeness of Sarbanes Oxley

Sarbanes Oxley has not been without its share of criticisms. A notable debate revolves around the balance between the Sarbanes Oxley Act’s intended effectiveness and the perceived burdens it places on businesses. Some argue that the stringent requirements, especially the documentation demands of Section 404 of Sarbanes Oxley Act 2002, impose significant financial and operational burdens, particularly on smaller companies.

9.2. Ongoing Discussions on Potential Amendments

The criticisms directed at Sarbanes Oxley have prompted ongoing discussions about potential amendments to the Sarbanes Oxley Act. Policymakers, industry experts, and corporate leaders engage in a continuous dialogue to identify areas where adjustments may be necessary. The objective is to refine the regulatory framework, addressing concerns without compromising the Sarbanes Oxley Act’s fundamental objectives of transparency, accountability, and investor protection.

Section 10. Case Studies

10.1. Success Stories of Sarbanes Oxley Implementation

Examining success stories of Sarbanes Oxley implementation unveils companies that not only navigated regulatory requirements adeptly but also leveraged the opportunity to enhance their internal controls and governance structures. These success stories serve as benchmarks, illustrating how proactive adherence to the principles of the Sarbanes Oxley Act 2002 can lead to not just compliance but also organizational resilience and sustainability.

10.2. Companies Facing Challenges in Compliance

Conversely, there are instances where companies faced challenges in achieving full compliance with Sarbanes Oxley. Factors such as organizational size, industry complexity, and the maturity of existing control frameworks contributed to varying levels of difficulty. Analyzing these challenges provides valuable insights into the nuanced dynamics of implementing regulatory reforms and underscores the need for flexibility in adapting to diverse organizational contexts.

Section 11. Evolving Landscape

11.1. Technological Advancements Reshaping Accounting Regulation

The landscape of accounting regulation continues to evolve, with technological advancements playing a pivotal role. Automation, artificial intelligence, and data analytics are reshaping how companies manage their financial information and comply with regulatory requirements. The integration of these technologies presents both opportunities and challenges for the future of accounting regulation.

11.2. Future Trends in Accounting Regulation

Anticipating future trends in accounting regulation requires an examination of emerging issues and global developments. The increasing prevalence of digital transactions, the rise of sustainable finance, and the impact of geopolitical factors all contribute to shaping the trajectory of accounting regulation. Understanding these trends is essential for businesses to proactively adapt to changing regulatory landscapes.

[spadesurvey]

Top 5 Market Research Companies in Malaysia

Table of Contents:

Market Research in Malaysia

How Do Market Research Companies in Malaysia Works?

Top 10 Market Research Companies in Malaysia

How Spade Survey Works

Conclusion

Malaysia has the perfect location for medical device producers, distributors, and investors to access new markets in Southeast Asia and beyond. By utilizing data-driven techniques and substantial expertise from several fields, we can help prospective customers and investors navigate the intricate details of the Malaysian healthcare system and identify the most promising opportunities for expansion.

In this blog post, we’ll examine five market research companies that help companies of all sizes and industries better understand their target markets and provide incentives for conducting research.

Whether you’re searching for competition intelligence, market segmentation, or consumer insights, these firms offer the know-how to deliver insightful results that inspire more research and creativity.

Market Research in Malaysia

Market research helps in improving your knowledge of your target audience by methodically obtaining and assessing data on your clientele. To help you make better decisions about your operations, target market, and business plans, it also entails investigating competitors and market trends.

Malaysia is located in the continental area of Asia. It is also a part of an enormous archipelago that extends westward from New Guinea and the Philippines to Sumatra. For this reason, Malaysia acts as a bridge connecting the islands to mainland Asia. It also acts as a gateway to the Indian Ocean and the China Sea. Because of its location, Malaysia is extremely valuable to both Southeast Asia and the rest of the world.

Spade Survey is among the leading Market Research Companies in Malaysia specialized in Asia & International Market Research and Data Collection Services. We are a full-service market research firm in Malaysia that offers both qualitative and quantitative research. We do research to gain customer insights, and then use our analysis and experience to provide meaningful, practical, and occasionally inspired recommendations.

How Do Market Research Companies in Malaysia Works?

Defined as a systemized process of gathering data from the target market and customers, market research plays a huge role in how companies can transform businesses successfully. Integral in determining if products or services are viable and if it’s something potential customers will buy, it helps you as the owner to make decisions on whether to launch it or look for other business opportunities.

Even major corporations do not forego this process and work with market research companies because of all the benefits they can get from it. When collecting data internally or through the assistance of a firm, the whole process involves:

Identifying the purpose of the research

Collecting and assessing the data from the market

Analysing and interpreting the data assessed earlier

Forwarding the final report to the client company

Business to business marketing research makes it possible for you to gather information and connect with your customers as you learn who they are, their wants and needs, their perceptions, their frustrations, etc.

List of the Top Market Research Companies in Malaysia

Here are some top market research firms that can assist you in expanding your view of the media and competitor landscape surrounding your company.

Market Research Company #1: TQPR Malaysia Sdn Bhd

Total Quality Public Relations (TQPR) Malaysia is the best market research company in Malaysia an independent strategic communications consultancy. TQPR based in Kuala Lumpur has offices in Thailand, Malaysia, and Vietnam, with affiliates throughout Southeast Asia.

It is also a member of The Worldcom Public Relations Group, the world’s largest alliance of independent public relations firms. For over 25 years, TQPR has been connecting businesses with Malaysian audiences. TQPR Malaysia is extremely adaptive, versatile, and responsive when clients require it. Total Quality Public Relations (TQPR) is a strategic communications consulting firm.

Services: Public Relations and logistical Support for PR Agency, Branding & PR for Telecommunications Company, PR Services for Convention Center

Foundation Year: 1995

Company Size: 2-9 employees

Address: Plaza Damas, L-2-9 Plaza Damas, 60, Jalan Sri Hartamas 1, Taman Sri Hartamas, 50480 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia

Website: www.tqpr.com

Market Research Company #2.Spade Survey

Spade Survey is a global market research firm in Malaysia that excels in market analysis and strategy reports. Spade Survey in-depth research and analysis are invaluable for companies looking to expand into new markets or adapt their strategies to stay competitive and thrive in an ever-changing global economy.

Spade Survey research methodologies and international presence make them a reliable partner for businesses seeking to build strong customer relationships and make data-driven decisions.  

Services Online Research, healthcare panel, Sample, Survey, physician panel, Research Support, Fieldwork in the Philippines, and fieldwork in Malaysia

Company size: 11-50 employees

Foundation Year: 2011

Address: Spade Survey, Office No – 1209, 12th Floor, Gaur City Mall, Sector 4, Greater Noida West, UP-201306.

Website: www.spadesurvey.com

Market Research Company #3 : METRIX RESEARCH SDN BHD

Metrix Research is a top market research company in Malaysia that provides marketing research and business intelligence solutions. Their goal has always been to provide better focus to clients and to redefine how research is to be approached.

They believe that a research agency should never function like a factory with robots that monotonously churn out mindless data. Instead, they believe, as a research specialist, it is their mission to see beyond data and unearth great insights.

At METRIX Research, they don’t let research remain at the grey data stage. Instead, they take it further and transform it into colourful solutions.

Services: Industrial /Business Research, Marketing research, Social and Political Research, Shopping research

Foundation Year: 2002

Company size: 40 employees

Address : METRIX RESEARCH SDN BHD (638135-M) No. 9.07, Level 9, The Heritage House,No. 33 Jalan Yap Ah Shak, 50300 Kuala Lumpur. Malaysia

Website: www.metrix.com.my

Market Research Company # 4: Acorn Marketing & Research Consultants (M) Sdn Bhd

ACORN is one of the best market research companies in Malaysia. They are equipped with multi-disciplinary skills, enabling them to approach issues with a multi-dimensional perspective. Their growth in almost thirty years has been attributed to our commitment to think together with clients. For this reason, they have gained a reputation for quality, insightful, actionable research for marketing decisions. They provide confidence to clients to grow in their business and come in the top 10 market research company in Malaysia

Services: Market Segmentation Study, Brand Equity Study, Brand and Ad Monitoring, Product Values Probe, Product Acceptance Test, Pricing Research, Communication Concept Research, Conjoint Modelling, Mobile and online surveys, Brand Strategy Development, Brand Activation — internal brand alignment, marketing communications, brand guidelines

Foundation Year: 1986

Company Size: 64 employees

Address: Lot 12-01, 12th Flr., Blk. B, HP Towers,12, Jalan Gelenggang, Damansara Heights

50490 KUALA LUMPUR W. Persekutuan Malaysia

Website: www.acornasia.com

Market Research Company #5: Central Force International Sdn Bhd

Central Force launched as a tiny team of five in 1996 and has grown to more than 50 permanent employees and over 200 part-time employees. Central Force operates two call centers, each of which can accommodate up to 80 CATI stations at any given time. To suit your every fieldwork demand, Central Force also offers its own on-premise data centre, as well as focus group and event hall facilities.

As the best market research company in Malaysia that has a proven track record of delivering quality and consistent data. Their team is highly experienced in conducting a variety of data collection methods, including CATI, CAPI, in-depth interviews, Focus groups, Ethnography, Diary, Assisted Shopping, and Mystery Shopping  amd many more. As a member of ESOMAR, Market Research Society Malaysia, and the Mystery Shopping Professionals Association, Central Force is proving themselves as the highest standards of ethics and professionalism in the industry.

Services: Agriculture, Healthcare / Pharmaceutical Business-to-business, Concept development & Strategy, Concept Testing, Public Opinion Research, Retail Research, Mystery Shopping, Data Collection / Field Service, Field Department – Independent, Qualitative, Focus groups, Quantitative, CAPI, CATI

Foundation Year: 1996

Company Size: 50 Employees

Address: CENTRAL FORCE INTERNATIONAL Kuala Lumpur, Malaysia 

Website: www.cforce-int.com

How Spade Survey Help

We recognize the worth of being the best source of information about your position relative to your market and competitors as one of the top market research companies in Malaysia.

According to the Spade Survey, the marketing strategy of a company needs a strong base that is produced by strategic analysis and research. The first step in the approach taken by the Best Market Research Consultants in Malaysia, like Spade Survey, is to get a thorough grasp of which you are, what you offer, and why prospective clients need to choose you over your rivals. Our marketers will thoroughly research your firm, its offerings, competitors, and the market in order to create a winning marketing plan for you.

Market research consulting firms may be able to help you gain a greater understanding of the target industry through data analysis and the production of significant insights into the market position. It provides company owners with a thorough grasp of the sector by gathering data from the ground up.

Developing an in-depth understanding of your market will assist you in designing a marketing campaign that will successfully attract potential customers. Understanding your market will enable you to create and launch goods that will meet its demands. More importantly, by conducting market research, you may precisely understand the market segments that comprise your clientele.

Conclusion:

We reviewed the Top 5 Market Research Companies in Malaysia that offer the best services worldwide. Market research firms provide numerous advantages to businesses by utilizing rewards and incentives across divisions. Market research may help firms make educated decisions, manage risks, and improve overall performance by analysing customer behavior and spotting market opportunities.

Companies may remain ahead of their competition, innovate their products and services, and improve consumer satisfaction by harnessing the expertise of market research organisations. Market research is a critical instrument that businesses should not disregard in today’s competitive business world.

If you’re looking for top market research companies in Malaysia, Spade Survey is one of the leading market research firms that work with businesses all around the globe, including MENA, South Asia, and the Americas. Our fact-based research studies provide strategic guidance to our clients, and we can produce research reports in brief, simply consumable versions as well as full-length, extensive reports based on your needs.

Contact us right away if you want to learn more about our services and how we can help your company.