Post # 2: Evaluating my Audience

The draft memo was an excellent way for me to focus my research efforts to uncover more information about how company managers communicate information to their investors and employees. What I discovered from this research was more information about the risks associated with communicating to employees and investors. Managers, which usually consist of an organization’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), are responsible and liable for submitting accurate financial documents to the public. If these financial documents have been corrupted, managers are the ones to blame. Therefore, I decided to focus my efforts on securities fraud. Securities fraud is the process of corrupting financial documents. I intend to explain the risks, detrimental possibilities, and methods for ending securities fraud.

For my audience, I have chosen company management. I feel that this is the perfect audience to explain the risks associated with committing securities fraud because this is usually were fraud occurs. Whether all managers are corrupt or other officials push them into falsifying profits, the end result lies with managers.

In my previous discussion board post, I spoke about how to communicate in the case of a financial crisis. Now I feel that a better approach may be to communicate how to prevent financial crises from occurring. There are multiple examples of securities fraud over the past decade. Please click here to learn more about some of these financial crises. Now I feel it is necessary to explain the consequences of financial fraud to managers. The effects are numerous. For example, in the Enron scandal, employees lost their retirement security and managers were sentenced to prison. But there are resources at their disposal to counter this negative outcome.

The resources I am using to support my argument that managers do have the power to prevent financial misconduct are outlined in my memo. I uncovered a huge amount of information, with various different methods that managers could use. One is to increase good ethical values in employees in companies by creating ethics programs. I feel that better ethical programs would help managers make better judgment calls in multiple situations, including financial reporting. For more information on how to create a better manager-employee relationship in an office environment, please click here.

I have also uncovered other ways that I feel could reduce the risk of securities fraud. One of them is to push for international financial reporting standards. Currently, financial reporting standards vary from country to country. In the United States the Generally Accepted Accounting Principles (GAAP), which is create by the Financial Accounting Standards Board, is used by all accountants. To eliminate the differences amongst countries, the International Accounting Standards Board is pushing for nations to adopt these global standards. According to Financial Accounting by Libby, Libby, and Short, some European nations have already adopted these standards (22).

I feel that the information I have found regarding the issues of securities fraud will allow me to draw my own conclusions about how it can be eliminated. Communicating these conclusions to company management is the next step.