Sarbance

Response # 1(Yming)

Part 1 Financial Acumen

1. Review at least three (3) articles on financial acuity. Summary the articles in 400 – 600 words. Use APA formatting throughout including in-text citations and references.

Have financial plan is a good way for retirement. This article is mainly about drawing in part on proprietary research, this column looks at shifting attitudes towards retirement and the impact of retirement on an individual’s personal identity and relationships, as well as addresses some of the challenges than can lie ahead, including diminishing mental acuity (Barsch, Rebekan, 2016). The authors mention the important aspects of retirement plan and give clients advices about how to shape their retirement plans and provide the best opportunities to clients with security as well as happiness.

The second article is High Medical Nursing Homes: Organizational and Market Factors Associated with Financial Performance. On average nursing homes have worse financial performance as well as lower quality. This article uses independent variables such as size, chain affiliation, market competition and control variables such as for-profit status, acuity index, staffing variables, etc. to find that organizational and market factors will affect financial performance of nursing homes. Higher financial performing facilities are characterize as having nurse practitioners/physician assistants, more beds, higher occupancy rate, higher Medicare and Medicaid census, and being for-profit and located in less competitive markets (Weech-Maldonado R, Lord J. 2019)

The third article is Development of Open and Transparent Information on the Public Finance Management. This article uses US as an example to provide accessible and transparent information of the public finance management. The practical application of the public financial management principles, given the process is open and transparent, brings together the interests of the authorities and civil society in terms of budget appropriations so that limited budget resources are allocated for the needs of social and economic development of the country (N. A. Guz. 2018). This article not only solve practical problems of decisions to ensure the transparency of the public finance management but also develop theoretical scenarios of the process.

2. Discuss the benefits of establishing solid financial acumen in a company? Discuss your personal experiences in a situation where financial acumen was either not supported as an organizational hallmark or, conversely, was built into the company's culture.

By establishing solid financial acumen in a company, it makes everyone, no matter the employee is in HR department or marketing department, understands how the company makes money, and why, why-not, when, or what-if behind a financial decision-making process.

In my company, our employer is very care about not only financial performance of everyday, we also ranking our employees’ financial sales numbers each month, every year. This build our company culture that we always want to be the best. Not only our company is the best in this industry, but also our employees. Because everyone are so energy in this company’s culture which pay attention to financial performance and financial acumen.

Part 2: Sarbanes- Oxley (SOX)

Rationale for SOX

The Sarbanes-Oxley Act is named after its sponsors, Senator Paul Sarbanes, D-Md., and Congressman Michael Oxley, R-Ohio. SOX cracks down on corporate fraud. It created the Public Company Accounting Oversight Board to oversee the accounting industry, it banned company loans to executives and gave job protection to whistleblowers (Kimberly Amadeo, 2018).

Provisions of SOX

Provisions of the Sarbanes-Oxley Act detail criminal and civil penalties for noncompliance, certifications of internal auditing, and increased financial disclosure. It affects public (and private) U.S. companies and non-U.S. companies with a U.S. presence.

Enforcement of SOX

The PCAOB has authority to investigate and discipline registered public accounting firms and persons associated with those firms for noncompliance with the Sarbance-Oxley Act of 2002, the rules of the PCAOB and the Securities and Exchange Commission, and other laws, rules, and professional standards governing the audits of public companies, brokers, and dealers. The PCAOB uses its disciplinary authority to demonstrate that auditors who run afoul of their professional obligations will face real consequences.

References:

Barsch, Rebekan, 2016. Looking beyond the Financial Plan to Help Clients Maximize Their Retirement Years. Retrieved from http://eds.b.ebscohost.com/eds/detail/detail?vid=3&sid=bf0e448c-7dab-41cd-9483-509e1e614e05%40sessionmgr101&bdata=JkF1dGhUeXBlPXNzbw%3d%3d#AN=113275524&db=buh

Weech-Maldonado R, Lord J. 2019. High Medicaid Nursing Homes: Organizational and Market Factors Associated With Financial Performance. Retrieved from http://eds.b.ebscohost.com/eds/detail/detail?vid=6&sid=fb1f8421-8453-48c2-aed1-664061a373dc%40pdc-v-sessmgr02&bdata=JkF1dGhUeXBlPXNzbw%3d%3d#AN=30739512&db=cmedm

N. A. Guz. 2018. Development of Open and Transparent Information on the Public Finance Management: the US Experience. Retrieved fromhttp://eds.b.ebscohost.com/eds/detail/detail?vid=15&sid=fb1f8421-8453-48c2-aed1-664061a373dc%40pdc-v-sessmgr02&bdata=JkF1dGhUeXBlPXNzbw%3d%3d#AN=edsdoj.0c1b698445094a5ba0fc78336ddcee08&db=edsdoj

Kimberly Amadeo, 2018. Sarbanes-Oxley Summary: Four Ways Sarbanes-Oxley Stops Corporate Fraud. Retrieved from https://www.thebalance.com/sarbanes-oxley-act-of-2002-3306254

Response#2( Shravan)

Part 1: Financial Acumen

1. Review at least three (3) articles on financial acuity.

1. Investments in technology

The technology sector includes everything from major companies that everyone knows, to players both big and small that operate largely behind the scenes. The category is also home to emerging companies of all sizes, start-ups, and billion-dollar household brands. In a broad sense, the category includes stocks involved with the research, creation, and distribution of technology-based goods or services. That can be everything from computers to software, televisions to websites. Hardware is the physical device -- a computer, a television, a smartphone, etc. Software is the computer code and platforms that make those devices work.

Technology stocks offer investors a lot of opportunities. In fact, the sector offered the highest returns of all ranked market sectors at 34.28% in 2017. Those strong returns, however, do not mean the technology sector is without risks. Technology changes quickly, and one-time leaders can quickly fall behind, or even go out of business. In addition, promising emerging companies may make a huge splash, only to fade out quickly.

2. Reduced overhead expense will offset gross margin declines.

Both approaches suggest distributors should carry more inventory, not less. Reconciling this need with the desire to develop a strong cash position requires fine-tuning the inventory. It cannot support the heavy-handed across-the-board cuts utilized too frequently.

The real solution is two-fold, involving eliminating redundancies and continual sales monitoring. Most of the problems with dead inventory are due to redundant items — those that are slow-selling and basically duplicates of faster-selling ones. In some industries, the slow sellers are non-sellers. There are large chunks of items that haven’t sold at all in the past six months or a year, and these need to be eliminated — even if it means selling them below cost. Items are moving through their life cycle quicker than ever before, with great sellers soon becoming good sellers. Eventually, they may become problem items. Make the effort to clear inventory as soon as the item is past its prime. If not, the excess inventory issue will arise again. Constant sales tracking is essential to this process.

3. Acuity is outpacing its revenue benchmark

The revenue growth of a company determines the overall health of the company’s customer value proposition. The goal of growth strategy is to drive better value for customers than competitors, and the output of achieving this is revenue growth that outpaces the industry. While benchmarking revenue growth seems straightforward, there is a nuance to this benchmarking that is often overlooked. Benchmarking a company’s revenue growth to the industry can be misleading, since the growth or decline of the total number of companies (firms) and establishments (e.g., stores, locations, offices) in an industry can skew overall industry revenue growth.

When benchmarking revenue growth of a company, make sure you benchmark it against the revenue growth per firm and establishment of the industry. In the below example of the same industry, you can see the difference in growth between industry revenue, industry revenue per firm, and industry revenue per establishment.

2. Discuss the benefits of establishing solid financial acumen in a company? Discuss your personal experiences in a situation where financial acumen was either not supported as an organizational hallmark or, conversely, was built into the company's culture.

Organization’s today, need managers and employees with business acumen who can contribute to the financial success of their companies. They need them to think and act like business owners. That’s why companies increasingly challenged finance departments to offer financial literacy training. However, finance courses that focus exclusively on financial terminology and financial statements aren’t enough. Instead, developing the business acumen of employees — going beyond financial literacy to a true understanding of what it takes for a business to make money and how everyone’s actions impact the financials — is the key to producing real results.

Management wants finance team to produce reports that:

1. Allow the employees to make good business decisions

2. Align employee actions with the organization’s strategic objectives

No employee wants to make a bad decision that impacts the profitability of the business. Consider the employee in charge of maintaining the tool room. He or she feels very satisfied with their job performance if the spare parts are in stock. He/she might not realize, however, the impact of having excessive spare parts inventory on working capital or obsolescence issues that may arise. Educating this employee on the financial consequences of inventory decisions and actions is fundamental to business alignment.

Once an organization establishes its strategic goals, HR and training must align their educational offerings with them. That means helping employees understand the goals and developing the required knowledge and skills. At the most basic level of alignment, they should ensure that every employee understands

Part 2: Sarbanes-Oxley (SOX)

A. Rationale for SOX

The rules and enforcement policies outlined in the Sarbanes-Oxley Act of 2002 amended or supplemented existing laws dealing with security regulation, including the Securities Exchange Act of 1934 and other laws enforced by the Securities and Exchange Commission (SEC) this mandates that senior corporate officers personally certify in writing that the company's financial statements "comply with SEC disclosure requirements and fairly present in all material aspects the operations and financial condition of the issuer." Officers who sign off on financial statements that they know to be inaccurate are subject to criminal penalties, including prison terms.

B. Provisions of SOX

Provision of SOX covers the responsibilities of a public corporation’s board of directors, adds criminal penalties for certain defined misconduct, and requires the Securities and Exchange Commission (SEC) to create regulations defining how public corporations are to comply with the law. It is intended to address issues of accounting fraud by attempting to improve both the accuracy and reliability of corporate disclosures. It also increases the accountability of company executives and members of the board of directors relative to pre-SOX requirements.

C. Enforcement of SOX

Enforcement of SOX compliance audit is a measure of how well your company manages its internal controls. While SOX doesn’t specifically mention information security, for practical purposes, an internal control is understood to be any type of protocol dealing with the infrastructure that handles your financial data. Indeed, one of the biggest criticisms of SOX is that, particularly for smaller firms, this requirement that all accounting systems must be subject to auditing is prohibitively expensive.

References:

1. Greene, Martin, Johnson, H. Scott, Torres, Anna, and Wong, Linda, “Beyond the Business Case: Diversity and the Small/Medium Firm,” Chicago Section Annual Conference, American Bar Association Section of Litigation, April 24-26, 2013

http://www.americanbar.org/content/dam/aba/administrative/litigation/materials/sac2013/sac_2013/56_beyond_the_business_percent20case.authcheckdam.

2. Gudrun Granholm, “Selling the Diversity Roi to Your CFO” Presentation to Diversity Best Practices Best Business Practice Session, September 27, 20122\

3. Timothy Kenney, “Diversity ROI: Not Just Talk, It’s Reality: Diversity and Inclusion Bringing Real $ to Organizations,” Diversity Best Practices Best Practice Session, September 2011, http://diversitybestpractices.com/files/_attachments_articles/freddie_mac_panel_final.

Response#3(Ravindra)

Summary :

The American Competitiveness and Corporate Accountability Act of 2002, usually known as the Sarbanes-Oxley Act, was marked into law on July 30, 2002. Gone in light of the corporate and bookkeeping outrages of Enron, Arthur Andersen, and others of 2001 and 2002, the law's motivation is to revamp open trust in America's corporate division. The law necessitates that traded on an open market organization stick to noteworthy new administration measures that expansion board individuals' jobs in regulating budgetary exchanges and inspecting methodology (Pgdc.com, 2019).

The Sarbanes-Oxley Act necessitates that every individual from the organization's review council be an individual from the governing body and be free. Freedom in the Act is characterized as not being a piece of the supervisory group and not getting any pay (either legitimately or by implication) from the organization for administration on the review advisory group, however board administration might be redressed.

Furthermore, organizations must reveal whether they have in any event one "monetary master" serving on the review board of trustees. On the off chance that they don't have such a specialist, they should uncover the method of reasoning behind that choice. Who qualifies as a "monetary master" is as yet being discussed? The Securities and Exchange Commission (SEC) proposes a definition that depends on a person's instruction and experience as an open bookkeeper, examiner, or chief bookkeeping official. At present, be that as it may, the organization's board appears to hold the last appropriate to set up explicit capabilities for a monetary master (Pgdc.com, 2019).

The review council is straightforwardly in charge of employing, setting the remuneration, and administering the examiner's exercises. It sets standards and procedures for grumblings concerning bookkeeping and interior control rehearses.

The costliest piece of the Sarbanes-Oxley Act is Section 404, which requires open organizations to perform broad inside control tests and incorporate an inner control report with their yearly reviews. Testing and recording manual and robotized controls in money related revealing requires tremendous exertion and inclusion of outside bookkeepers as well as experienced IT work force. The consistence cost is particularly troublesome for organizations that intensely depend on manual controls. The Sarbanes-Oxley Act has urged organizations to make their monetary revealing increasingly productive, brought together and computerized (Investopedia, 2019).

Benefits :

At the point when Congress briskly passed the Sarbanes-Oxley Act of 2002, it had as a top priority fighting extortion, improving the dependability of monetary detailing, and reestablishing financial specialist certainty. Justifiably, most officials asked why they ought to be exposed to a similar consistence troubles as the individuals who had been careless or untrustworthy. Littler organizations griped about the imposing business model of administrators' time and costs running into a great many dollars.

In any case, the weights of actualizing SOX just because, in 2004, were great to the point that this progressively ground breaking gathering could give brief period to creating and embracing arrangements and practices that went past strict consistence. Some talked about putting their arranged activities in a "parking garage,'' with the expectation of seeking after them the next year. As SOX became effective, an ever increasing number of administrators started to see the requirement for inner changes; undoubtedly, many were frightened by the shortcomings and holes that consistence audits and appraisals had uncovered, for example, absence of implementation of existing arrangements, superfluous multifaceted nature, stopped up correspondences, and a weak consistence culture (Harvard Business Review, 2019).

Part - 2

A. Rationale for SOX

The rationale behind the Sarbanes-Oxley Act is best reflected by the occasions in the years going before its establishment. The 1990's denoted a time of momentous financial development, to a great extent driven by the Internet blast, which saw the arrangement of another industry of web related organizations impelled by investors. Market certainty was high, and the NASDAQ achieved a record-breaking high of more than 5,000 in March of 2000. Be that as it may, out of sight of this financial success, organizations like Enron Corporation, a Texas-based vitality organization, were taking part in different kinds of bookkeeping extortion that would prompt their definitive downfall and trigger another time of monetary guideline (Wharton Public Policy Initative, 2019).

B. Provisions of SOX

The Act has clearing estimates that manage monetary announcing, irreconcilable situations, oversight of the bookkeeping calling, corporate morals, and advancement of new criminal and common punishments.

C. Enforcement of SOX

In view of the Act, SOX has figured out how to confirm CFO and CEO of different organizations, encouraged filings of electronic insider exchanges, improves nearness of free review advisory group with expanded jobs just as cementing interior controls. These achievements have had immense positive effects on the administration and the executives of people in general and privately-owned businesses in the US. This aides in shielding the fundamental prerequisites that our market be classified dependent on the degree of speculator cooperation and certainty.

References :

Pgdc.com. (2019). The Sarbanes-Oxley Act and Implications for Nonprofit Organizations | Planned Giving Design Center. [online] Available at: https://www.pgdc.com/pgdc/sarbanes-oxley-act-and-implications-nonprofit-organizations

Investopedia. (2019). The Impact of the Sarbanes-Oxley Act of 2002. [online] Available at: https://www.investopedia.com/ask/answers/052815/what-impact-did-sarbanesoxley-act-have-corporate-governance-united-states.asp

Harvard Business Review. (2019). The Unexpected Benefits of Sarbanes-Oxley. [online] Available at: https://hbr.org/2006/04/the-unexpected-benefits-of-sarbanes-oxley

Wharton Public Policy Initative. (2019). The Sarbanes-Oxley Act and its Effect on Investor Confidence. [online] Available at: https://publicpolicy.wharton.upenn.edu/live/news/465-the-sarbanes-oxley-act-and-its-effect-on-investor