Seven Basic Quality tools documents
Definition of Quality Management -- it is a method for ensuring that all the activities necessary to design, develop and implement a product or service are effective and efficient with respect to the system and its performance. It is also a principle set by the company to endure the continuous advocacy of quality services and products, or the further improvement of it.
Welcome to QT-charts knowledge base section. Hopefully you will find some of them useful in your work.
(Read articles below to learn more.)
Professional Malpractice
Amanda
Kushlan
Original
text on www.freequality.org
Webster’s
New Collegiate Dictionary (1977) defined malpractice as, “1: A
dereliction of professional duty or a failure to exercise an accepted degree of
professional skill or learning by one (as a physician) rendering professional
services which results in injury, loss, or damage;” and “2: an injurious,
negligent, or improper practice.” Medical malpractice tends to come to
mind at first thought of the term “malpractice”. As recent history has
proven; however, any professional service provider can be culpable of
malpractice. Highly publicized companies have been found to be crossing
ethical boundaries into malpractice. “Business ethics is a subset of ethics:
there is no special set of ethical principles that applies only to the world of
business. . . . Ethics can be broadly defined as the study of what is right or
good for human beings. It pursues the questions of what people ought to
do, what goals they should pursue.” (Mann and Roberts, 2000).
The Enron and WorldCom
scandals have brought forth an increased public awareness of corporate and
accounting malpractice. Citigroup, Inc. and Household International, Inc.
are under fire for their lending practices (Mollenkamp and Beckett,
2002). Investors, consumers, and the general public are questioning what
role auditors and government regulators are playing, as their interference does
not seem to be beneficial. Not to mention the auditors themselves are guilty
of malpractice, as is the case with Arthur Andersen LLP.
According to Sandberg and
Solomon (2002), WorldCom’s announcement that it engaged in a massive $9 billion
accounting fraud has caused it to become the largest case of corporate
misrepresentation in United States corporate history. However, on the
tails of this an “October 2002 United States General Accounting Office study
indicated that from 1997 through its report date in 2002, almost ten percent of
all publicly traded companies had restated their earnings” (Cheffers, Renda and
Bourassa, ch. 1). Enron was losing billions of dollars; yet, their
financial statements reported record profits. Arthur Andersen’s failure
to state the earnings properly and the criminal act of destroying documents cost
them the United States arm of the International Corporation in addition to a
substantial amount of money and their reputation. All of these are
grievous instances of professional malpractice.
Citigroup, Inc. agreed in
September, 2002 to pay $215 million in a answer to charges of deceptive
marketing and lending practices brought forth by the Federal Trade Commission
(Mollenkamp & Beckett, 2002). Household International, Inc. has
acknowledged it had mistakenly misled borrowers, but insists those accounts
only make up minute portion of the loans it makes annually. Consequently,
the Corporation is currently facing suits in multiple states (Schoen).
How are these flagrant
acts of misconduct to be assuaged? Schoen reported that according to
Keith O’Connor, vice president of government affairs at the Mortgage Bankers
Association, increased regulations are not the answer; however, better
enforcement of existing laws is really what is required. The American
Institute of Certified Public Accountants (AICPA) has disagreed, at least from
an auditing standpoint, indicating both are essential. Both new
regulations and stricter enforcement are surfacing in auditing standards.
Already in place are new accounting standards shifting the responsibility in fraud
discovery.
The AICPA has implemented Statement
on Auditing Standards (SAS) 99: consideration of Fraud in a Financial
Statement Audit, replacing SAS 82, giving auditors expanded guidelines for
detecting fraud. In addition, the AICPA has created a Competency Self-Assessment
Tool (CAT) to aid future CPAs and financial professionals in determining
competencies. This tool can be found at
http://www.cpa2biz.com/cpeconferences/cat.htm. Furthermore, according to
www.accountingmalpractice.com the AICPA has presented stringent guidelines for
an audit engagement team to follow. “Integrity in financial statement
reporting is one of the linchpins of an efficiently operating business
environment. Without a belief in the validity of business claims,
stakeholders would have to spend an inordinate amount of time verifying
information” (AccountingMalpractice.com, 2002).
Integrity in all
professions, not just in financial reporting, is crucial for all aspects of the
business. Malpractice does not relate only to the medical profession.
Ultimately, implementation of new laws and regulations, and increased
enforcement will heighten awareness and diminish certain corporate and
accounting malpractice.
References
Cheffers,
M.L., CPA, ABV, Renda, C.M., Esq., and Bourassa, J.R. (n.d.). Loss
prevention primer. Retrieved November 16, 2002, from
http://www.accountingmalpractice.com/0002/primer.php?c=ch-01.
“Malpractice,”
Webster’s new Collegiate Dictionary, 1977.
Mann,
R.A., & Roberts, B.S. (2000). Smith & Roberson’s
Business Law (11th ed.). Cincinnati: West Legal
Studies in Business.
Mollenkamp,
C., & Beckett, P. (2002, October 4). Household International,
Inc. may be near large settlement. The Wall Street Journal, p. A6.
Sandberg,
J., & Solomon, D. (2002, November 11). H-P’s Capellas leads
list to be CEO of WorldCom. The Wall Street Journal, pp. A3, A9.
SAS
99 and your duty to detect fraud: How quickly do you need to
respond? (2002). Retrieved November 16, 2002, from
http://www.accountingmalpractice.com/0005/articles/ga-200210a.pdf.
Schoen,
J.W. (n.d.). Regulators on the prowl for predatory lenders.
Retrieved November 16, 2002, from http://www.msnbc.com/news/805701.asp.