Aig Scandal

[pic] THE INTERNAL CONTROLS AND FINANCIAL ACTIVITIES THAT LED TO THE BAILOUT OF OUR NATION’S LARGEST INSURANCE COMPANY By: Monte Schwartz PREFACE Anyone who stares at the TV has in all likelihood observed the American International Group (hereinafter AIG) business with the young man who strolls into his parent’s room while they are resting. At the point when his mom inquires as to whether he had a bad dream, he says â€Å"no† and that he’s stressed over his parent’s monetary future. Following a twenty-second spiel about his concerns, the dad says, â€Å"Buddy, we’re with AIG† and he goes, â€Å"Oh! what's more, leaves the room and (accepting) back to his room. [1] AIG, built up as a Delaware enterprise in 1921 by Maurice â€Å"Hank† Greenburg, is basically occupied with protection related and budgetary exercises in the United States and European nations (more than 130 joined aggregate); including however not restricted to home protection, vehicle protection, life coverage and different ventures. Envision that this young men parents’ find one day with their monetary organizers that they lost the entirety of their speculations and protections where they paid dearly.The guardians had consented to make a venture so they and their kids could have a made sure about future insurance against showcase dangers. Indeed, it turned into a reality for some Americans. This overwhelming misfortune left numerous citizens with misused resources alongside a weight to pay the â€Å"bill† for the bailout of AIG. PART I: HOUSING MARKET SCANDAL: VIOLATIONS IN BUSINESS OPERATIONS To comprehend the bookkeeping outrage of AIG, one should initially comprehend its business exchanges and tasks paving the way to the SEC examinations. In 1993, President Bill Clinton marked into law the OmnibusBudget Reconciliation Act, ordinarily known as the OBRA-93 or the Deficit Reduction Act. Part XIII, is our essential center, the Re venue Reconciliation Act which permits impediments on official remunerations by constraining the deductible for charge purposes to $1 Million except if the pay was earned through execution, rewards or value: at last expanding the normal administrators check. [2] When an executive’s check rate is basically a reward, those benefits can prompt choices that are not in the wellbeing, present moment and long haul, of citizens or shareholders.You may think what this Act has to do with AIG, however this demonstration is the very pith of why AIG bombed as a business. AIG had paid its top administrators an incredible $165 million in rewards after it had gotten bailout reserves. In mid 1995, the Clinton Administration gave new and reconsidered guidelines to the Community Reinvestment Act, or CRA (in which was made by the Jimmy Carter organization) which de-stress a loan specialist to make emotional appraisal quantifies for carefully numerical portions, or as others may state, racial sha res. 3] In less complex terms, private banks were constrained to give advances to low pay families and minority neighborhoods as long as the individual was making a type of pay to reimburse the advance and didn't require any inception of a credit check. In a greater number of ways than one, this was a Federal plan that forced and coerced banks into advancing cash to individuals at high-chance. The new guidelines additionally taught moneylenders to consider how well they reacted to protests from gatherings, for example, Minority Community Activist associations like ACORN.In December of that year, Henry Cisneros (herinafter Cisneros), at that point head of Department of Housing and Urban Development (hereinafter HUD), moved Fanny Mae and Freddie Mac towards a necessity that 42% of the home loans would now serve overwhelmingly minority neighborhoods and low to direct salary families. In 2000, Andrew Cuomo (hereinafter Cuomo), Cisneros’ replacement, built up a considerably progre ssively forceful social-building objective by expanding the quantity of home loans to half by technique for drastically climbing Fanny Mae’s and Freddie Mac’s commands to purchase home loans to under-serve neighborhoods for the low salary. 4] Cuomo additionally urged them to unequivocally enter the sub-prime advance markets, which are credit-default trade markets. What's more, who sold the credit-default trades? AIG did, in light of the fact that it was a protection on bonds. Huge banks purchase securities and protection arrangements so that if an organization, state General Electric, ought to go into chapter 11, the huge bank is out on whatever top notch sum it paid and gets cash from whoever sold the protection strategy, which for this situation was AIG since AIG was the greatest financier of credit-default trades. 5] Take for example, for instance, General Electric (GE)[6]. There are just two (2) reasons with respect to why a bank would buy credit-default trades. It is possible that they would prefer not to give the full acknowledge sum as it might be a hazard or they are hoping to shroud something, similar to a money exchange. Assume that Bank A needs to better its business relationship with GE thus GE requests $70 million using a loan. The bank, consequently, addresses their senior credit chief that the greatest they can give is $50 million, because of hazard exposure.However, so as to fulfill the client, the bank loans the $70 million in any case and discounts the $20 million contrast by buying a credit-default trade from Bank B. The main issue is, GE accepts the whole $70 million originated from Bank A. Presently, Bank B was â€Å"AIG Financial Products† (hereinafter AIGFP), a division of AIG. Bank A was Bank of America, Wells Fargo, JP Morgan Chase, and so on. PART II: THE ACCOUNTING SCANDAL: VIOLATIONS OF INTERNAL CONTROL There are four (4) most normal methods of mutilating a company’s budgetary condition.They are income ac knowledgment, cost or cost acknowledgment, representing stores and bookkeeping identified with business mixes. [7] AIG mutilated their financials through representing holds. I don't get that's meaning however? In bookkeeping, organizations use stores to take care of future costs, for example, charges, conceivable suit and pay-off obligations or different liabilities. At the point when an organization purposefully adulterates data and deceives examiners of genuine monetary reports, these phony exchanges are otherwise called â€Å"sham transactions†.In 2001, the Securities Exchange Commission (in this after SEC) started researching and making charges that AIG was giving speculators, investors and evaluators with bogus fiscal summaries, demonstrating two hoax plans where the organization modified its accounting reports through fake exchanges in endeavors to hide the company’s misfortunes on ventures identified with the credit default trades. By September of 2003, the SEC documented a claim against an organization known as Brightpoint Inc. (hereinafter Brightpoint), in which is a discount merchant of electronics.Their charges included, yet not restricted to, inappropriate utilization of protection arrangements in endeavoring to diminish a misfortune by 11. 9 Million in endeavors to show the open a littler misfortune. Therefore, Brightpoint’s Financial Statements exaggerated their total compensation. The SEC discovered their overall gain exaggerated by 61%. [8] It was uncovered later in the disclosure time frame that AIG was associated with helping Brightpoint to spread out their misfortunes over a timespan. This method is known as â€Å"retroactive insurance† which consolidated two arrangements into one.The two approaches were the Retroactive Coverage and a Prospective Coverage. The â€Å"policy† should take care of the expense of misfortunes over a three-year term. The thought was to â€Å"smooth† the fiscal report with t he goal that the general population didn't see such an effect of misfortunes by AIG customers. Brightpoint paid a month to month premium for this strategy of $15 Million. This strategy, while totally fake, permitted Brightpoint to show an Insurance Receivable of $11. 9 Million. It couldn't be any more obvious, SEC v. Brightpoint (2003). Retroactive Coverage isn't insurance.It simply moved money starting with one spot then onto the next, which the SEC called a â€Å"round-excursion of cash†. Brightpoint kept monies with AIG and later on, AIG would restore the assets; yet mark it off in their books as though they made an Insurance Claim Payment. There was no hazard being moved. When Auditors understood that this approach wasn’t a serious Insurance Policy, Brightpoint started making â€Å"restatements† to their budget reports. Clearly there is extortion when the books require various â€Å"restatements†. After the SEC had recorded their claim, AIG immediatel y settled on understandings to make due with $10 Million.This was just a common punishment. No criminal punishments were managed by the Federal Courts for this â€Å"Retro-dynamic Policy†. This installment of $10 Million came about in AIG’s benefit a negligible $100,000. It's just plain obvious, SEC v. Brightpoint (2003). Brightpoint was by all account not the only organization got â€Å"assistance† from AIG around a similar time span. Another organization, known as PNC Financial Services Group Inc. (hereinafter PNC), was likewise included. So, PNC was a Pennsylvania bank holding organization. AIG caused PNC to move $762 million of advantages off of the monetary records. 9] By now, it appears AIG was a â€Å"pro† at misshaping asset reports. They didn’t like low overall gains and they helped other people by sharing their strategies of â€Å"distortion†. The SEC calls these â€Å"PAGIC† exchanges, since total compensations mysteriously show benefit. PNC had moved their advantages for another substance which PNC held significant intrigue. They had made three (3) exchanges which were proposed to decrease their misfortunes with respect to advances and funding ventures by â€Å"transferring†, as per the SEC outline findings.PNC had then neglected to represent these exchanges as an advantage or an advance which neglected to show up on their monetary records. This diminished their introduction to â€Å"troubled credits and unstable assets†. (See SEC v. PNC Financial Services, Inc. ) These exchanges were clearly structure

Why God Allowed Sin into the World Essay Example | Topics and Well Written Essays - 500 words

Why God Allowed Sin into the World - Essay Example This paper represents that numerous definitions are being used in setting up the genuine significance of wrongdoing. Among the numerous definitions, numerous people ordinarily utilize two. Sin is the infringement of a perfect relationship that exists among God and an individual or sin likewise includes from the perfect request of people. To be sure, the two definitions give a decent establishment to the comprehension of transgression and the different angles relating to it. On such a comprehension on what sin is, deciding the significant reasons adding to why God permitted sin into the world stays an altogether simple assignment. Many inquiry the motivation behind why God licenses sin to reign on the planet, which causes incredible enduring among numerous people, in spite of His almighty nature. Sin began from the Garden of Eden after the defiance of Adam and Eve, in the wake of doing in opposition to the desire of God. Such a comprehension achieves two significant reasons with regar ds to why God permitted sin into the world. God permitted sin into the world so as to show his actual nature and other significant exercises. God permits sin into the world as a proof that without a doubt sin and its shrewd nature are dangerous, and that the enduring ascribed to sin, proofs that any complexity to God’s will brings about torment, torment, lastly prompts passing. God's tendency shows best in people through affliction, taking into account that during sufferings, numerous people will in general fix their relationship with God.

Second Job Interview Questions and Answers

Second Job Interview Questions and Answers “Congratulations! The job is yours”. That is a something you hope to hear after completing a job interview or the last round of them. This statement, however, does not come so easily especially considering the competitive nature of interviews.After successfully passing the first interview that mostly evaluates your qualifications and the rest of your resume, there is usually a second interview.The second interview is where the real vetting happens, and it involves a conversation between the company decision maker/s and you. If you have not met your potential manager during your first interview, it is highly likely that he/she will be involved in the second one.On the other hand, if you had your first interview with him/her, then the second interview most probably will be done by the manager whom he/she reports to.It is in this interview that you need a different approach to communicate as compared to the first screening. During the second interview, you need to steer the conversa tion in a direction of what you will do for the company if given the role.Meaning, you must have the nitty gritty about the company goals, vision, mission, as well as the competing firms including some possible strategies to outsmart them.BEFORE ENTERING THE INTERVIEW ROOMHaving attended the first interview, you must have learned some interview hacks for killing it in the interview room. There is a lot to borrow from the first interview when preparing for your second interview.Right from the familiarity with the venue, the outfit to wear to how you carry yourself during the interview. However, performing well inany interview requires essential skills and behavior.When you received the invitation for the second interview, they must have informed you about the details of where it will be held and at what time. If the location is different from the one of the first interview, it will be a good idea to visit the new venue prior to your interview to be sure of the exact location and not be late. In any case, this will help you to locate the exact room and to estimate the time needed for you to get there.Before the day of the second interview, conduct a research about the job position but also about the company. Use your contacts, friends, and the Internet to get information about the company. This will enable you to talk about the history and future of the organization and why you want to work there. Prepare few questions for the interviewer about any uncertainty you might have. Of course, this must be related to the job post and the employer. You will look good every time you go into an interview room with brilliant questions. Study your resume in detail and know everything about it. Any experience or skills written on the resume are subject to discussion during the interview. Therefore, be very keen on whatever you have written and eliminate any materials that you cannot explain. Remember to bring a copy of your printed resume and any supporting documents (certif icates, reference letters, etc.).Make it a general rule to always check the outfit you intend to wear to your interview beforehand. Make sure it is clean, and if any ironing is required take your time to straighten out the creases. Do not wait for the morning shock; try the outfit so that you can make sure it is a perfect fit for the next day. Any accessories such as the watches and pieces of jewelry should be worn in moderation. In fact, you should ensure that your accessories complement who you are or maybe what you hope to be in the employer’s company.On the interview day, allow sufficient time to get there. It’s all right to be up to 10 minutes early, but no more than that as the interviewer may not be prepared for you. Do not forget to have the phone number of the company that invited you so that you can call them, in the event you are running late.THE TYPES OF QUESTIONS AT THE SECOND INTERVIEWThere are a variety of questions that may be asked during the second interview. N otably, they are categorized into:1. Questions asking for personal informationMost likely the interview will be opened with questions about your demographic information.You are expected to tell the panelists more about you especially because all or some of them have not met you yet. Start with a clear summary of who you are and what you have done so far, and then you can dive into talking about your current job position (if you have any) and what are theprincipal duties that you handle at present.2. Questions related to education and qualificationsIn this series of questions, expect inquiries about the reasons that make you a great candidate for the position, including your educational background, such as: “Where did you study?”, “What are your highest academic achievements?”, and so on.Here the panel is interested in finding out your knowledge that would make you successful in this position. It is of importance to point out the specific subjects in the coursework that have trained you for the vacancy.If you have a feeling that education background is not a perfect match for the job, you may omit it and include only that which is relevant.Do not assume that the interviewers have read/memorized what you have written in your resume, as the interviewers are not the salesperson, you are. 3. Questions about work experienceThese questions are related to your current and previous employment opportunities and the skills you acquired during these experiences â€" for example, “How do you feel that your past job has prepared you for this position?”.When answering these questions, you should discuss how the skills acquired from your previous job have prepared you for the new situation you are seeking.Be aware of the possibility that some of the interview panelists may probe on why you are leaving the current position. Here, you will require being a bit more cautious about how you handle this query.Do not ill-talk the company you had been working for or engage in a discussion on how severe your previous employer was. Defend your interests in the current position without dragging anyone or any other company to it. 4. Critical thinking questionsThese are also known as brainteaser questions. These questions entail scenarios that are tricky and difficult.Therefore, they want to test your response to such situations. The secret behind brainteasers is that it does not seek a right answer, but instead its tests your critical thinking and creativity.5. Personality-related questionsThese tend to bring out your personality in an interview. They try to examine your skills as compared to your character. This is the conversation where you are expected to repackage your hobbies and interests, extracurricular activities such as sporting activities.It is essential to note some of the desirable skills such as intrapersonal skills or being adaptable, working safely, being responsible, maintaining a positive attitude, and learning continuously.Teamwork skil ls include working with others, participate in tasks and projects. Fundamental skills include excellent communication, managing information, problem-solving and critical thinking.“Have you ever been a leader?” is one of the questions that you may be asked.You must be ready to repackage your experiences from the pastime activities that have demonstrated the skill in question.Responses such as, In my tenure as the volleyball coach, I was able to lead my team to the national championship where we came first. demonstrate the value you are likely to bring to the company.Some of the job advertisements usually indicate the values they are looking for, so be keen to read them thoroughly. It is important to point out if you have trained others on any of these or other skills because employers are very interested in workers who are willing and able to educate others.6. Opinion questionsThe interviewer wants to assess you on handling a series of scenarios that you may find yourself in whil e you are working for them. In this situation, the interviewer seeks to get insight into your decision-making skills.These include items such as “What would you in such and such a situation?” or “What are your weaknesses and strengths?”.These opinion-type questions are generally tricky, and the interviewer is seeking for you to display honesty and self-awareness, so go on and answer what is the one thing you would change in yourself.Now, let us look at some of the common questions and their best responses.THE SECOND INTERVIEW QUESTIONS AND ANSWERS1. Q: “Have you thought of any questions since our last meeting?”A: The answer is that the interviewer wants to check your motivation and eagerness for the job you are seeking. If you need a job so much, you will mostly have many things to think about at the last meeting.Of course, you should only ask questions for which you have not found the answers after you researched the current job position and the company. So, make sure y ou do a thorough background search for information.Otherwise, it may seem like you did not learn anything new about the company from the time you did the first interview. You should embrace this opportunity to inquire about areas you need clarifications as it another chance to leave a good impression similar to “Do You Have Any Questions for Me?” question in the first interview.Ask questions about the role, the organization and about the projects being undertaken. Avoid questions that are outside of the parameters of the professionalism such as the ones about the personal life of the interviewer, or gossips about their colleagues should be avoided by all means.2. Q: “Why do you want to work here?”A: The answer is simple but you can only answer it appropriately if you collected enough data about the company. The interviewer wants to learn about your career goals and the way in which they fit the position you are seeking.For this, you will need to understand the company’s an d the department’s preferences and priorities. Portray your urge and high interest in the job and how motivated are you to perform well at this vacant position.3. Q: “What makes you NOT want to work here?” or “What would you change in our company?”A: The answer to these questions should be inspired by the fact that the interviewer wants to get a picture of the values that you find important.In addition, it will show off your areas of expertise and analytical skills.Therefore, it is critical for you to explain what you would change about the company briefly; then go more in-depth into details why and how would you make the change.Now try to state how the change affects the position you are seeking. Remember to keep your answers concise and informative, while keeping yourself humble and grounded. 4. Q: “Do you prefer to work alone or as part of a team?” or “Do you prefer following instructions or acting independently?”A: The answer to these can be a bit tricky. The i nterviewer is interested in knowing if you are more comfortable working alone or in a team. Whether you go for individual or teamwork setting, make sure you highlight the reasons for your preferred choice.Depending on the nature of work in question, sometimes having multiple brains is beneficial because there will be many ideas or perhaps if you feel more motivated by your peers.On the other hand, you may wish to work independently if speed and efficiency are crucial at the situation as you will not be waiting on others to finish their task and you will not be debating ideas with anyone.Draw from your different experiences where you had worked independently and as a team, as by now you must have hints about whether you are more productive when you work alone or with others.5. Q: “What is your ultimate career goal/dream?”A: The answer is guided by the need of interviewers to know whether you have any longtime career plans and to see how their vacancy fits in them. The interviewer s will try to figure out if you want their job to stay in for a long time or you want to hop on it as a stepping stone to another post soon.When you get such a question, start with the short-term dreams/goals and then move to long-term dreams/goals. One of the short terms can be getting a job while long-term goals can be excelling in that job.Lastly, make sure that the goals are attainable and achievable.6. Q: “What can you do for this company if we hire you?” or “Why should we hire you?” or “Why are you the best person for the job?”A: The answer is supposed to market you and sell your ideas to the interviewer. In fact, you should make yourself so appealing that the interviewers should not think about hiring anybody else but you. Highlight the top reasons for them to hire you and give relevant examples for each reason. The key thing should be to focus on critical accomplishments, awards, education, technical skills, experience and soft skills.Remember that the interviewe rs hire the best person and most people coming to the interview are qualified, so it is up to you to articulate the best skills. The skills and explanation should focus on how the company will benefit from your work, and not how you will benefit from working in their company or industry.Also, point out your passion for joining the industry, your passion for the product/s they have, their ranking, the way they conduct their business, and/or their corporate social responsibility. You should have confidence, enthusiasm, and passion in your voice while you give to explain to the interviewers.7. Q: “Can you share an example where you have used your problem-solving abilities?”A: In almost all job interviews, problem-solving skills are critical attributes that the interviewers look for in a candidate.You should be prepared to give a story about your best problem-solving experiences. It could be in the form of narration about the most impressive challenges that you have overcome in your line of duty.The interviewer can also provide you with an example of a problem and then asks you to state the steps that you would undertake to solve it.8. Q: “How have you coped with changing processes and circumstances at work?”A: Here, the interviewer is interested in knowing how well you can adapt to changes. They are looking out to recognize how quickly you can cope with changes and adjust to the new environment.It is important to portray traits such as confidence when faced with changes, indicate how a previous work experience required copying and highlight of any skill that helps you adapt to changes. In this question, do not share false examples, do not get nervous or unsure and do not have a short answer only for the interviewer to move to the next question.9. Q: “What are your salary expectations?”A: This is among the tricky questions that are usually asked during the second interview. To give a realistic figure you must be familiar with the range of salary given to people working in a similar position as the one you applied for.If you give a figure that is too low, the company might offer you an even lower starting salary, but if you state a figure that which is too high for their budget, the company may offer the job to someone else. In case you have no specific figure in mind, you can try to answer the question by stating that you expect the salary to correspond to your qualifications and experience or higher than what you are currently earning.10. Q: “What is your notice period?”A: Please note that this question does not mean that it is then when you will be hired. Do not be in a hurry to resign from your current position; wait until the interviewers confirm that they like you the most among all the other candidates.Be honest on the current job notice timeframe, otherwise, you might not be able to start on time at your new job or suffer consequences if you leave your old job sooner that the notice period you agreed on in your work ag reement.11. Q: “What are the first three things you would do if you land the job?”A: Easy peasy, the interviewers are looking for actions that are practical. They are looking out for whether you understand their environment so it is therefore essential that you have a good idea of their work processes.If you provide the interviewer/swith ideas and you do not know how to make them happen, say that you will find that out as you move along with the job. If your strategy requires collaboration with others, it is important to state not just your role, but also the role of the other key team players.JOB INTERVIEW ETIQUETTEAs you prepare for your second interview, keep in mind the following â€" interview etiquette has never gone out of fashion. They are few simple things that a candidate does during a job interview to show politeness regardless of whether they are walking or talking. Just as how you have heard of table manners, there is also a code of conduct to be observed during inte rviews.Remember etiquette may be your selling point so carry your manners with you to the second interview as well. Do not laugh when there is nothing to laugh at, and do not forget to greet the interview panelist/s when you arrive.How you sit in front of the panel speaks more than you would imagine. It will speak about how confident you are about the interview, how prepared you are amongst others. Ensure that you sit upright. It’s essential you move around the chair to match the interviewer asking the question; this action eases stage fright.Ensure your legs have less movement since that could be a sign of nervousness. Keep your posture open since crossed arms suggest a defensive position. Use appropriate gestures to reinforce or emphasize critical points. Open palms indicate honesty and openness.Right-hand movements while talking suggest that you are giving information. The left hand signifies that you are ready to receive data.WHAT TO REMEMBERWhenever you find yourself that you cannot answer an inevitable question, you may get silent and even wish the floor would open up and swallow you whole. However, do not worry because here are tips to ensure you answer the question.First of all, be calm so that you can be psychologically focused. This is enhanced by taking a deep breath and telling yourself that it is OK.Also, do not ever say, “I don’t know,” as it is important that you at least try to answer the questions but without making stuff up. If you did not understand the question, ask the interviewer for clarifications.Passing an interview brings a joy for every job seeker; therefore, you should always strive to be the one to outsmart the rest. Being the best requires you to do adequate research about the company, be focused, be on time, show courage and be enthusiastic.You should also be a good listener so that the interviewers do not keep on repeating same questions and it also helps you to answer the asked questions.Also, give specific examples tha t highlight your success; these examples should be prepared before the interview, ask questions for clarification and additional information that are relevant to the conversation. Good luck to your second interview!