SEC probes Thaicom insider share deal claims

http://www.bangkokpost.com/news/local/38875/sec-probes-thaicom-insider-share-deal-claims

Summary:
U.S. Security and Exchange Commission have recently found an obscene patter in share prices of a satellite operating company, Thaicom. Although the Stock Exchange of Thailand may not pick out the irregular jump of share prices and volume for Thaicom, but the share price on Monday increased up to 29% right after the talks that the Finance Minister had about buying out indirect stake. Then Thaicom shares fail drastically. The opposition politicians are suspecting whether there is insider trading involved in Thaicom along with the follow up from SEC. Of course the suspected individual revealed that they do not know any further information about this stock-price change. There were also Thai politicians involved in the insider trading.
Connection:
Chapter 5 mentioned about the Users of Financial Statements, insiders and outsiders. Insiders consist of owners, executive, and management group. These groups of people's roles are to monitor the company's financial health. However, in the article, the insiders of the company are suspected insider trading. The financial minister manipulated the non-public information to change the share prices so that he will make money from his share knowing that the company might buy out the indirect stake in satellite operator. He even argued that none of his relatives and friends brought shares or gained money. The outsiders of the financial statements are looking at the share history and wonder why there is such a vast different in the closing price.
Reflection:
The article stated that there is a SET trading system that picks out the irregular share activities. However, it is obvious that there is something wrong with the share prices and the SET system did not picked it out. As shareholders, we do not know that if this missed detection was intentional or on purpose because the system was set up by the Thai government. Even so, two politicians are suspected involved in the yet-to-know insider trading scandal; therefore, no one knows if these two cases are related. However, the actual victim that suffered is the innocent shareholders. They do not know what dangerous stock prices are waiting for them because they obviously do not know the non-public news, the share prices will drop and lastly, they suffer when the company faces fraught and political risks.

Former FairPoint employee charged with stealing from company

http://www.nashuatelegraph.com/news/758027-196/fairpoint-employee-charged-with-stealing-and-selling.html

Summary:
Recently, Fairpoint Communications employee was caught stealing cooper cable from the company and reselling it in scrap metal yard. The employee was found guilty and charged with two crimes. The employee was a former worker for Fairpoint Communications who took the cooper wire directly from the FairPoint facility. There has been similar case in May 2010.
Connection:
In chapter 14.4 we learned about the importance of internal control of a company. As stated, internal control is a set of accounting procedures established to protect the assets from theft and waste, ensure accurate accounting data, encourage efficiency, and adhere to company policies. As we can see that internal control must be very strict in order for it to work but if the company has a strict internal control then why are there still be employees stealing cooper cables to resell at the black market? The company has trusted that employees should be honest and loyal to the company. Clearly, the company did not make this point clear for the employee.
Reflection:
When company encounter situation such as stealing, they need to make sure that they treat it properly and make the right decision. Obviously, the company does not want to the harm the relationship but at the same time let the employees know that everything they do must be for the company's benefits. However, in this case the title stated that the employee has already resigned so should the company treated as a regular stealing case or should the company go with the by-laws of the company to make sure that this sets an example for other employees in the company? I think they should work out a system where managers and team leaders are responsible to tell the employee what is ethical. But, of course, we all know that stealing is not right, then why would employees still do it? The company should seek to see where the root of the problem is. Maybe the employees are in short of money or in deep debts.

For zero-interest loan, check cash discount

http://www.business-standard.com/india/news/for-zero-interest-loan-check-cash-discount/378845/

Summary:

The article stresses that the term zero-interest loan is just a bait to lure innocent buyers to make purchases that does not really make them better off. The Reserve Bank of India often reminds consumers that zero-interest loans could be misleading about the true prices of products. These schemes are usually set up on expensive electronics. Malhar Majumder, a principal financial planner of the Black and White Financial Managers, claims that a lot of consumers forget to bargain whenever they see zero-interest loan. He also suggest that consumers should check with their credit card companies to see if there are any offers with no hidden charges and processing fees, because these offers are usually cheaper than zero-interest loan

Connection:

Cash discount is supposed to be a reduction on the amount that a consumer needs to pay. Companies lure consumers into their schemes of purchasing high price products with zero-interest loans, consequently, consumers will forget to bargain like asking for a cash discount.

Reflection:

The concept of cash discount in general should benefit both the firm and consumer. However, firms who set these zero-interest loan schemes up to trick consumer will only benefit the firms and not the consumers. This is because consumers would end up paying more interest rate, hidden charges, and processing fees than the zero-interest loan.

September retail sales rise, but are still weaker over same time last year.

By David Friend @ http://ca.news.yahoo.com/s/capress/091123/business/statscan_retail_6

Summary:

The sales of merchandising businesses have increased in September, but relatively low gain has shown compared to last year. However, results are more positive when compared month-to-month. The reason for the decline in sales is due to last year global recession. Sales have increase in supermarkets and most merchandising businesses. The home supplies and clothing and accessories sectors have been decreasing. Doug Porter, the deputy chief economist at BMO Capital Markets claims that the Canadian economy is in full recovery mode. Retail sales rose in eight provinces in September, except for Alberta and Saskatchewan.

Reflection:

I assume that as retail sales increase, the inventory of those businesses will also increase. The reason for this is that retailers have to purchase more inventories in order to fulfill the demand of consumers; otherwise, it will lead to inventory shortage. The Canadian economy is recovering, therefore, this trend of increasing sales will continue.

Connection:

Merchandising business is a type of business that buys and sells goods to make profit. In this article, it talks about sales of retail businesses, which is a type of merchandising business that buy goods from wholesalers and manufacturers and sell to public. This is related to our chapter since the chapter is on merchandising business. As mentioned earlier, increasing sales could possibly lead to increase in inventory, which is also another topic this chapter has covered.

First-time Adoption of IFRS

http://www.cica.ca/ifrs/ifrs-transition-resources/implementing-ifrs/item2707.aspx

Summarize
Starting by January 2011, all the companies are required to convert from the Canadian GAAP to the International Financial Reporting Standards which is the IFRS. A lot of Canada's public companies are fushing to meet the requirements so that their report can meed to international requirements.Country like European Union, Australia, South Africa started to adopting IFRS five years ago. IFRS is more common worldwide, it makes the report more clearer and simpler.Chartered accountants of Canada recommend the Canadian companies to get started earlier.Start now…to be prepared for January 1, 2010.

Connections
The material we are learning right now is all about GAAP and the accounting system is going to change real soon. Is the school going to change the learning material? Since our country is updating our accounting system the GAAP is no longer the guideline for accounting.Accountant have to get used to the new accounting system and get used to the worldwide financial reporting language. As they say IFRS represent vital competitive advantages in the global marketplace, the GAAP is now out dated.

Reflection
I am so worry that the material i learned from accounting is not longer updated. If i want to continue my education in Hong Kong how can i connect the GAAP and the IFRS together? Why didn't Canada start adopting IFRS earlier? But its good that Canada finally meet the international requirement and become more competitive in the global marketplace.Hope this will improve Canada economic a bit, so many people can get a job to improve their life style.