Recent incidences of corporate or banking scandals happened in U.S Essay

Recent incidences of corporate or banking scandals happened in U.S companies or pecuniary insitutions - Essay ExampleAt the same time, the Lehman Brothers reduced assets on the left side of the political partys statement of financial position. The Lehman Brothers in like manner systematically utilise the repos to finance some projects. Instead of reporting that the repos were utilise for financing reasons, the Lehman Brothers disclosed the repos as asset sales to mislead investors (Elliott and Treanor 5). This allowed the Lehman Brothers to use the proceeds gained from the repo to reduce its supplement right just before the reporting period. By September 2008, the repo proceeds had reached $50 billion resulting in bankruptcy. The investigators were amazed to learn that this amount was even to a greater extent than the bonds that were due at the time General Motors went bankrupt the previous year. The repo proceeds were also comparable to the gross domestic product of Switzerlan d in 2008. Amazingly, the top executives of the company then, including its CEO Dick Fuld denied any knowledge of the companys use of Repo cv (Elliott and Treanor 5). It was also amazing that Ernst & Young, the leading audit firm for the company gave straight-out report without noting the misstatements in the companys books of account.... From the analysis of the case, it became apparent that the companys top executives made serious errors of business judgments, which ought not to have occurred. For instance, it was wrong for the top executives of the company to mislead investors of the real picture of the company by manipulating the balance tacking. As earlier indicated, the Lehman Brothers tried to stop its demise by falsify the balance sheet to deceive investors about its true financial picture. This was unethical act, which executives ought to avoid. The companys financial statement is very important since it shows investors how the company is performing, which also influenc e their investment decisions (Goldmann and Hilton 21). According to the accounting and auditing standards, the top executives of the company were supposed to report the real financial position of the company. The Lehman Brothers also breached the corporate governance and focusing ethics by using Repo cv to manipulate its balance sheet. In this regard, we realize from the case that the Lehman Brothers diverted $50 billion of its toxic assets from its balance sheet in the early 2008 rather than disposing of the repos and reporting the same at a loss. After doing so, Wolff observed that the lack of strong internal control allowed the Lehman Brothers to treat the repo 105 transaction as proceeds instead of financing (2). To make matters worse, the chief financial officer was found to have sent emails indicating that repo 105 should be used to reduce liabilities in the statement of financial position of the country. This was indeed a serious breach of accounting principle. In addition, the top executives of the company failed to disclose the repo 105 to the rating agencies,