Other financial risks managers face in management are credit risks which arise from non-payment of loans and grants by debtors or market risks that arise from changes in interest rates, currency and equity risks. Managers need to recognize the crucial role external auditors play in creating internal control systems to deal with financial risks, arising from poor management decisions and unethical conduct (Bob and Esamaddin, 2007)
Effective manager seeks learning in financial and conceptual competencies necessary to avoid the financial mistakes made by the management of Enron. This manager must change their attitudes, values, and mind-sets to align them with their managerial roles, duties, and responsibilities above their personal interests (Hill, 2003)
The second ethos from social networks recognizes that management does not work alone, but is involved in an interactive environment with different employees and stakeholders. Therefore, their moral ethos is the product of the situations and relations they are in contact with (Jackall, 2010)
However, despite the best efforts, accounting scandals like the Cendant Corporation's $300 million bogus revenue indicate that external auditors and managers are not doing their job. It is the perception of management and financial scholars that social and political forces interfere with the ability of auditors and managers to meet their obligation and uncover management misdeeds (Lublin and MacDonald, 1998)
Financial and Management Strategies Enron is an illustration of the fundamental need for ethical standards in management, since ethics are required for trust for without trust the organization falls apart. This is because Enron puts into focus important and cherished business ethics of the last two decades into harsh reality (Millman 2002)
Reviewing literature and news stories reveals that any financial scandal has had a bigger effect on the management rather than the employees or other stakeholders. This implies that in the current business world, the roles of management are no longer defined by Henri Fayol's management principles of coordinating, organizing, planning, or controlling (Mintzberg 1989)
A significant supplementary source of funds for the nonprofit world is charity in its diverse appearances of yearly giving, capital campaigns, and intended giving. "Cash flow is king and annual giving and capital gifts are often critical to financial viability" (Epstein & McFarlan, 2011)
Services are the programs and actions the organization offers to its clients. Accountants categorize goods and services as resources since they have a worth or may be used to generate value or revenues (The Most Common Financial, Management Risks Facing Nonprofits, n
This stewardship can be demonstrated through the use of effective financial accounting and reporting systems. The financial accounting systems require the not-for-profit organization to divide resources across two or more financial and accounting entities (Bauers, 2006)
The Use of Fund: A not-for-profit organization is created for the common good of the public including educational, religious, and charitable purposes. Therefore, profits or funds raised by these organizations must be channeled back into the organization in order to help in accomplishing its mission (Carter, n
Generally, the budget shows the performance goals for the upcoming financial year. The preparation of budgets in a not-for-profit organization is primarily based on policy decisions (McCarthy, Shelmon & Mattie, 2012)
Once these programs and activities are decided, the organization's staff allocates resources that are geared towards ensuring that the programs are delivered or undertaken. For not-for-profit organizations to develop a reasonable, understandable, and accurate budget, they must have practical knowledge of terminology and accounting standards (McMillan, 2010, p
demonstrating accountability and stewardship, planning and budgeting, and determining the organization's financial position. The basis of fund accounting in not-for-profit organizations is to calculate changes in available assets for future services (Meade, 2010)
Notably, the budget should be updated for new situations in order to respond to any unforeseen conditions that arise. Moreover, after the budget is adopted, the not-for-profit organization should use periodic reports for comparison of budgeted revenues with actual revenues as well as budgeted expenses with real expenses (Zietlow, Hankin & Seidner, 2011)
Nonetheless, because commercial banks are subject to bank runs, which impose banks to liquidate long-term projects, stock markets most likely, have a more significant task in stimulating productive investment. Stock markets may assist to solve the problems of asymmetric information when countries begin to liberalize their financial sector while not possessing a well functioning equity market (Cho, 1986)
These days a fast growth of the stock markets is taken to be a vital element of the development of the financial sector of these economies. Stock market developments together with other forms of financial market development happen concurrently and complement each other (Demirguc-Kunt and Levine, 1996)
These days a fast growth of the stock markets is taken to be a vital element of the development of the financial sector of these economies. Stock market developments together with other forms of financial market development happen concurrently and complement each other (Demirguc-Kunt and Levine, 1996)
Though the structure of corporate finance differs broadly between the developing countries, the corporate sector used equity finance which is significant. Share of net investment expenditures, equity funds became more than debt finance, or internally generated funds in 1980s within the countries like Korea, and Thailand (Singh and Hamid 1993)
Though the structure of corporate finance differs broadly between the developing countries, the corporate sector used equity finance which is significant. Share of net investment expenditures, equity funds became more than debt finance, or internally generated funds in 1980s within the countries like Korea, and Thailand (Singh and Hamid 1993)
When suggesting sources of available funding, for example, the manager must remember some businesspersons wish to retain a high level of control over their organization's vision and decision-making. While venture capitalists can be a valuable source of financing, someone with high ethical standards might shy away from soliciting aid from someone who wishes a controlling interest in the business (Miller 2009)