At the most foundational level, capitalism is moral.
The only way to succeed in the long-term is to treat customers well and honestly. That will provide money to the company to continue paying staff and vendors as well as leaving a profit for owners.
If a company does not deliver a quality product or service that customers value with higher utility to them than the cost to provide by the company, then the company won’t be around long.
At the core level, it is moral to satisfy your customers with profit left over.
CPA Ron Baker makes this point more eloquently than me in his LinkedIn article, Are Corporations Socially Responsible?
By the way, the answer is yes.
If a corporation provides value to customers, both the company and customer will be better off after the transaction than before. That is a positive social value.
Doing so, within the framework of the law (as Milton Freidman points out) is the duty of a business and it is also highly socially responsible.
Looking closely at a specific fraud case shows the depth of the damage caused by fraud. That also lets us see the horrible impact a fraud has on the fraudster and his or her family.
Take a look at the story of Amy Wilson, who stole $350,000 from her employer. She served four years in prison. She is working to restore her life and has made a lot of progress.
What could you learn from the video?
Listen as she tells of the devastation she caused her dear husband and beloved children.
Listen as she tells of the betrayal she caused her oh so nice employer.
Listen for clues on how you could take steps that might prevent this kind of devastation from shredding your ministry.
If you want to learn more of her story, you could visit her website: Read the rest of this entry »
I listened to a CPE class by Sam Antar last week (Crazy Eddie CFO and ex-CPA Sam Antar Shows You How He Cooked the Books). Great class, in case you are looking for 2 hours of CPE. (Cross posted from my other blog, Nonprofit Update.)
He suggested that unlike what has been said for a long time, prostitution is not the world’s oldest profession.
Instead, he suggested that committing fraud is the world’s oldest profession.
How can that be?
Go back to the garden of Eden. The serpent deceived Eve through a knowing misrepresentation of the truth in order to deceive her and take something from her. His intent was to harm her.
Definition of fraud
The Wall Street Journal reports ”Flipped” Bankers Aid U.S. in Foreign-Exchange Probe – Criminal Charges Are Expected as Early as Next Month.
Looks like it is time to pay attention to a new fiasco. After manipulating LIBOR comes the foreign exchange rates, or forex.
Article appears to be based on lots of leaks. In a tossup between guessing whether the Justice Department or the banks are leaking most of the info, I’ll guess the slightly higher probability is the feds.
This new fiasco is apparently developed from information obtained during the LIBOR investigations.
Individual enforcement action this time
Last Monday the NCAA dialed back the already mild sanctions on Penn State for covering up years of child molestation.
The school is now eligible for post-season games after sitting out two years. The initial penalty was a four-year ban.
The school can resume its full amount of allowed scholarships instead of cutting them back just a little bit for four years. They only took a two-year reduction in scholarships.
The Wall Street Journal describes the end of sanctions: NCAA Lifts Penn State’s Postseason Ban.
This post is part of the conversation on this blog on the severity of punishment for egregious behavior. Should there be capital punishment, as with Arthur Andersen? Or should there be cost-of-doing-business punishment, as with the big banks and Penn State.
I discussed this two years ago: On capital punishment of organizations – Arthur Andersen and Penn State – corporate death versus mild sanctions
Let’s walk through the four penalties imposed on Penn State. Let me explain why this was mild and is now milder.
Consider your vulnerabilities to a software vendor disappearing overnight.
I changed RSS readers for a third time this week. They keep shutting down on me.
As an active blogger, reading a lot of blogs therefore access to news sources is mission critical. Well, I suppose I choose to make it mission critical – it’s a big deal for me.
Substitute your mission critical applications for my reliance on RSS feed and you can think through an assessment of how vulnerable you are to vendors just going away.
(Cross-posted from my other blog, Nonprofit Update. Think about your tax software or audit software as you read this post.)
On Monday Bloglines disappeared. That has been my RSS feed for quite a while. I thought, might be a server problem. Maybe a software upgrade that failed. Down lines somewhere. I can live with that for a little bit.
I previously discussed the AICPA’s new Enhancing Audit Quality initiative.
The AICPA has made available a number of documents to start the discussion of the project.