College of Business & Economics
Managerial Accounting for Decision Making ACCT602-L01
-Spring 2016-
Ethical Project -AOL Time Warner Case-
Presented To: Prof. Hani Mohamed Mostafa Mohamed
Prepared By: Chawqi Abdel Fattah
Table of Content
I- Introduction…………………………………………………………………………3
II- Before “Round-Trip” transactions………………………………………………….4
III- Unethical Vs Illegal ………………………………………………………………..5
IV- “Round Trip” ad sales Consequences ……………………………………………..6
V- Lessons Learned and Conclusion ……………………………………………….....8
VI- References………………………………………………………………………….9
I- Introduction: Through this study, we will get into an important subject in business environment, related to accounting practices. Obviously, distinguish …show more content…
In fact, Sales people would go into young companies and start-up enterprises, and encourage them to accept AOL investment, which consists of taking an equity stake in the company. In return, these companies will spend the investment funds on advertising with AOL over the coming months. These companies – seeking to inflate their investment potential – were subsequently not entirely honest about the ties involved with AOL’s support. As example, AOL would pay an inflated price for services or products, like computer or servers, in return, the vendor would then purchase online …show more content…
4- Code of Conduct: A new regulation was introduced, all employees have to read and acknowledge the understanding of company code of conduct.
After this accounting scandal, employees and society started to perceive AOL differently. Lack of trust and confidence about company values presented another aspect to manage and correct from AOL executives. Then, AOL Time Warner started its own initiatives, by setting four principles, which formed the pillars of “AOL Principles of Business Ethics”. It was appreciated by relevant stakeholders to streamline all employees into “ethics behaviors and decisions”.
1- Leadership: Leading by example, and “We got it wrong. We have to do something different. We have to take this seriously” were the motif across the whole organization.
2- Training: Make employees aware about AOL values and let them understand their purposes and work in adherence with them.
3- Culture: Documents, processes, policies and regulations are not sufficient, to make people in act the same way. Openness and transparency were introduced as part of AOL