ACCT-4100 Lecture Notes - Lecture 2: Enron Scandal, Internal Control
14 Sep 2019
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Document Summary
Risk taking + executive resistance to bad news + level of internal competition: results in management lacking complete information. = increasing transaction complexity and velocity (employees should have knowledge of work they do) + gaps in diagnostic measures (are we measuring the right things?) Kidder peabody rec to get the company started: growth = 5 + 3 + 5 = 13, culture = 4 + 5 + 4 = 13, info. Mgmt = 5 + 5 + 5 = 15: 5 questions to ask regarding risk, have core values been communicated, unsure kidder peabody had any, have behaviors/actions that are off-limits been identified, no boundary system was set up. Is monitoring of critical performance measures sufficient: high levels of unrealized profits so, no, are control systems designed to ensure learning, kidder peabody the managers were resistant to bad news weren"t learning from past mistakes.
