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Numerous reports involving bank financial improprieties and scandals have of late sound dismally like a well-known name in the current real world. However, the banking sector may not have experienced anything like what recently happened to the Bank of America. The Bank of is pompously recognized as the biggest banking institution in the United States with a large customer from over 150 nations. Together with other money lending institutions, the bank of America was on the news spotlight yet again, but this time with a scandal known as “Robo” signing case. In the recent past, the Bank of America had previously involved itself with enough negative media hype following the various multi-fraud allegations made against the bank by various public services such as schools and hospitals. The most notable past incident is the Meryl Lynch scandal, which involved a multi-billion project go on rogue. In late 2010, the bank found its way back to the top headlines following the “Robo” signing case (Elias 63).
The “Robo” signing resulted after a series of shoddy mortgage shortcuts and paperwork. The signing made some of the United State’s largest banks, such as JP-Morgan, Bank of America and Wells Fargo to momentarily close down foreclosures. Up to now, mortgage regulators have not requested lenders to clear the millions of imagined documents filed more than one decade.
In one or another, various property deals have been directly or indirectly linked with the “Robo” signing scandal, wherethe bankwould bypass the legal court procedure inacquiring theREO ortheforeclosed and therefore ending upwith numerous documentssigned byRobo.Forthis reason, themainquestion beingasked bymany people iswho the real ownerto most ofthe properties fromforeclosures is issued bythe Bank ofAmerica aswell whopreviously made adown payment ordepositonaproperty priortothe scandal. Theresponse lies inthegreat number ofscarcity in properties for saleforeclosure. Following the “Robo” signing scandal, aseveral people face thepotential riskoflosing theirhomes since theorganization orbank was not authorized tosell the property (Simpson 2).
The difficulties have turned out to be continuous, and the cases of “Robo” signing have left an enormous gap in the property bazaar of the United States in addition to numerous indecisive assets’ proprietors. Even though the Bank of America placed a vow to end “Robo” signing in all fifty nations, it would actually be unattainable to revise and undo all the previously “Robo” signed credentials for various foreclosure possessions. For the quitting and revising of all the papers to occur, Bank of America would essentially have to utilize plenty of workers on a short-term job just to finish this assignment. Therefore, though a promise to discontinue “Robo” signing has been set by Bank of America, it however does not assist the unlucky persons who have innocently been involved in this disgrace while ingenuously making some efforts to acquire their desired assets. Relatively, something should still be accomplished to determine this matter of massive magnitude; and the issue has been a basis of unnecessary negative exposure for Bank of America.
There is an improved technique of avoiding business humiliation like those displayed by the Robo Signing incidence. The answer is in the method through which the inventory is prepared. At present, all companies possess an assessor who they typically take in hand for extensive interludes of time, probably owing to the reality that these associations develop and generate learning practices that assist directors boost their competence at managing their companies. This synergy increases output and continuing expansion, and hence is excellent for the financial system. Nevertheless, that is what usuallytakes place. This customarily implies that, occasionally, there is a possibility of having an outlier, and it is difficult for the standard shareholder or authoritarian panel to notice it approaching. Disagreements of values can occur when the assessors of extremely huge corporations (such as Arthur Andersen’s auditors who assessed companies like WorldCom and Enron) are rewarded millions of money for each year in payments. On occasion, they may perhaps acknowledge little indiscretions to keep their vital customers contented, particularly if they believe it will be approved in the subsequent phase. (Elias 65).
The question that we ultimately ask ourselves is how such disgraces, which cause losses of millions of dollars and spoil shareholder assurance, can be avoided? The answer entails organizing the bookkeeping companies’ motivations suitably, to lessen the differences in values that exist at the moment. The perception is easy: every organization concerned with shareholders (specifically firms that issue stocks, funds set aside for reserves or savings like joint or hedge finances, and the like) are obliged to replace their assessors after five years. When a firm closes its contract with its auditors, the company will be forced to go back into the auditing groups and fish for new auditors who will begin working for the business on a clean plate. This way, the company-auditor requirements would remain competent since the best and wealthiest firms will go for the top agencies and hence end up with the best auditors; of course at a higher cost (Simpson 2).
In addition, the fresh system will be capable of maintaining a sense of balance as well as offering a source of incentives of both the auditor and the company. In view of the fact that a different accounting firm might capture the work of the present auditor, each one of the accounting firm will have a sturdy incentive to perform the job properly. As a result, this new system will be self regulatory with the capability to monitor itself, with little or no external intervention. The government could simply chip in incase inconsistencies are found in the newly audited reports.