Unit One Ac504 Homework

In: Business and Management

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China’s tainted baby milk powder

1. Yes I believe that there was some damage to Baidu.com reputation. According to the article there were rumors that Baidu.com was accepting payments to keep information from surfacing regarding the tainted milk during a search, which goes against the integrity of the company. Also Baidu.com was under attack for not separating paid advertisements from non-paid search results. 2. Because of the rumors, it could cause the stakeholders to lose confidence in Baidu.com. If the public believes that Baidu.com is guilty of producing some unreliable search results, it could cause numerous problems for Baidu.com. Also the paid advertisers could take their business elsewhere. 3. If Baidu.com could reassure their stakeholders that their information is reliable. And the companies that pay for advertising will receive the services expected. If they are unable to restore their creditability they could possibly go out of business as indicated by the drop in their stock.
‘5. By developing a culture of openness and by diminishing that culture of secrecy. And the government putting laws in place to determine the behavior of the country.

WorldCom: The Final Catalyst 1. WorldCom created excess reserves or provisions for future expenses, which they later released or reduced, thereby adding to profits. The manipulation of profit through reserves or provisions is known as “cookie jar” accounting. According to the SEC first, WorldCom improperly released certain reserves held against operating expenses. Second, WorldCom improperly recharacterized certain operating costs as capital assets.

2. I am uncertain, but I believe the Arthur Andersen auditor lost its independence when conducting the WorldCom audit. Two members of upper management were previous employees of Arthur Andersen made personal. And the fact that Andersen’s…...

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