Determining the conflict of interest

Assignment Help Finance Basics
Reference no: EM131318553

Accounting statements can be manipulated. Please try to give an argument pro and con on this ethical issue. Any actual public examples you would like to cite would be most appreciated by all.

Scenario: Many brokerage firms got into a lot of trouble because their analysts continued to recommend clients "buy" Enron as its share price plummeted. This was due to the conflict of interest in that those brokerage firms did not want to lose Enron as a client. It was said that "buy" recommendation was really a "hold". Also, a "hold" recommendation really meant, "sell" because no brokers wanted to lose clients.

Do you believe a stock analyst can truly be independent if he knows his brokerage firm depends on the corporation he is evaluating for tens of millions of dollars in underwriting fees each year? Explain.

Reference no: EM131318553

Questions Cloud

Performance of a journal bearing around a rotating shaft : Suggest appropriate parameters to be used in correlating experimental data for such a system.
Toys breakeven point in units : Toy Corp. produces and sells pinball machines. Its average selling price is currently $5,400 per game. Based on a review of its projected financial statements, the company's variable costs are $2,800 per unit sold and total fixed costs are $39,000..
Calculate return on common equity and times interest earned : The balance sheet for Schultz Bone Company.- Calculate Return on assets, Return on total equity, Return on common equity and Times interest earned.
Identify the prevalence rates for the clinical disorder : Identify the prevalence rates for the clinical disorder you have selected, including prevalence rates for at least two of the following groups:  gender, race, ethnicity, social economic status, differently abled or sexual orientation
Determining the conflict of interest : Scenario: Many brokerage firms got into a lot of trouble because their analysts continued to recommend clients "buy" Enron as its share price plummeted. This was due to the conflict of interest in that those brokerage firms did not want to lose En..
Are the employees satisfied or is there a lot of complaining : Job satisfaction of the employees: Are the employees satisfied or is there a lot of complaining, absenteeism, and turnover? What could the company be doing to improve job satisfaction?
Determine the independent dimensionless groups : Determine the independent dimensionless groups that would allow the surface-tension effect to be analyzed. Neglect any effects of viscosity.
Compare person-centered theory with maslow''s hierarchy : Compare person-centered theory with Maslow's hierarchy of needs.Use Maslow's hierarchy of needs to discuss the extent to which growth needs influence personality formation.Outline the main components of person-centered theory that contribute to perso..
How do ideas of home influence where and how : It might be suggested that ‘commercial' hospitality is just an extension of hospitality in the home--do you agree? Discuss, using both academic literature and real world examples.

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe the following project breakeven and profitability

what is capital budgeting? why are capital budgeting decisions so important to businesses?what is the purpose of

  Case of exchange rate regime

Explain and show under which case of exchange rate regime and capital controls combination this country will be better off. Fully justify your choice of regime - ECON 481

  Overview of financial management

From the e-Activity, examine ethical behavior within firms in relation to financial management. Provide two (2) examples of companies that have been guilty of ethics-based malfeasance related to financial management and determine why their comeupp..

  How much potential value would the firm lose

You were hired to advise the firm on the best procedure. If the wrong decision criterion is used, how much potential value would the firm lose?

  What is nominal interest rate on a 7-year treasury security

The maturity risk premium is estimated to be 0.0005 x (t-1), where t = number of years to maturity. What is the nominal interest rate on a 7 year Treasury security?

  Compute the capital structure leverage ratio components

Compute the rate of ROCE for Year 4 and disaggregate it into profit margin for ROCE, assets turnover, and capital structure leverage ratio components.

  What are some of the drawbacks using dividend growth model

Is there a significant difference? Please explain your answer. What are some of the drawbacks using Dividend Growth Model, or any other dividend based pricing model?

  What apr rate should you charge your customers

To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. What APR rate should you charge your customers?

  Manage risk and enhance returns in stock portfolio

So far, things have gone well with Dr. Bueller. Before you wrap up your meetings and he begins investing, you decide to spend a little time sharing information with him about using derivatives to manage risk and enhance returns in his stock portfo..

  Approach looks at future needs of dependents

Which of the following statements regarding life insurance needs is / are correct? 1. The human life value approach looks forward for information. 2. The capitalization of income approach looks at right now only for information.3. The needs approa..

  The corporations tax rate is 30 what is the deferred tax

xyz corporation expensed on the financial statements 2000000 for depreciation expense during the year using straight

  Trevor price bought 10-year bonds issued by harvest foods

trevor price bought 10-year bonds issued by harvest foods five years ago for 1013.24. the bonds make semiannual coupon

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd