to acknowledge the need for fundamental change to their independence rules. Instead, in a joint statement issued on Dec. 4, the CEOs of the Big Five focused largely on improving the rules of accountancy. Industry leader James S. Turley, chairman of Ernst & Young, says that rather than an audit failure, Enron "at its core was a business failure."
2.2. Enforcement of Sarbanes-Oxley Act
The Sar
A firm should consider its shareholders first. In the basic 10 assumptions of economics, everybody in the world seeks maximization of their own profit. Not of our profit, which is sorry for that, but due to the self-focused behavior, the world has been going toward.
So, I, as a shareholder of Danone, cannot accept this kind of virtue sacrificing shareholders’ interest. Can this business model
loans is the PF.
- Project Financing(PF)
PF is a loan product to support real estate development project for land purchase money, cost of construction, working expense and so on. Before lending, the bank assesses the project about development feasibility and future cash flow analysis and holds the land as collateral. Qualifications for a loan are given to corporations and owned businesses. Use
to the information from company data bases, someof their customers paid their invoices late. To recover balances (or lack of cash) the company took out a loan and consequently they had to pay extra interest expense.
This interest expense caused by late payment reduces the profitability of each order those of which payment was late referring the calculation in question number 2-E. Interest of pay
Agency cost
- Moral Hazard Problem
- Adverse Selection
Agency theory
Agency theory is a set of ideas on organizational control based on the belief that the separation of the ownership from management creates the potential for the wishes of owners to be ignored.
중략
Case study - 1
unrelated business
Most of growth due to a series of acquisitions
that were unrelated business.