Letters from Prison
Sadly when reading this article the most amazing lesson that jumps to mind is how easy it is for a bright business manager and a growing company to run into trouble for failing to follow basic business measurement principles. Constant vigilance and observance of the financial documents is imperative to ensure a healthy growth for any company and professional career.
Computer Associates International, Inc. (CA) was a four-person start-up founded in 1976. CA produced software for IBM computers to assist businesses with database, application, and financial management software related computing needs. Stephan Richards joined the company in 1988 as a recent college graduate and had a meteoric run directly up the
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This analysis should have impacted the thoughts of the reader as to who is responsible for the safeguarding of financial statements. At least it should have provoked the idea that perhaps not only auditors and accountants are responsible for accuracy of financial documents. It seems clear that company executives actually have more direct impact on the safety of the financial statements than the previously mentioned parties. It is the company executives and board of directors that establish company goals. These same parties then create the business environment threw the type of internal controls and motivators established in the organizational structure. If focus is to meet at short term goal at any cost with little separation of duties and communication of respect for the basic accounting concepts, it is very probable that companies will deviate from ethical accounting. Regulators often are only involved in the process for too late to be effective and really play more of a fireman role in putting out the flames than a preventive role. Consider having incentives for opening private company accounting books to regulators during the growth period of a company, perhaps a reasonable tax deduction for companies that meet a specific criteria set by regulatory agencies would motivate them to improve their accounting practices to be more