Ac557 Case Study

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What now?!

AC 557-01N Internal Control Assessment and Design

December 1, 2013

Pamela Bates

December 1, 2013

Pamela Bates

Describe the Situation

We all took part in this financial dilemma. We purchased cars for status, overextended credit to take extravagant vacations and bought larger homes that were not economically sensible. Who need a 5 bedroom home when the total family count is 3 anyway? We trusted the lies of the banks instead of using our own common sense. Never in a million suns would citizens believe that the money would stop and cause a recession. So how do we exist the downward spiral? Many report that the recession dates from 2007 to 2010. Are we sure it’s over? Personally, I don’t think so because the average citizen will feel the loss for generations to come. To validate the scare, I know of several families who are grouping together in order to survive just as it was 100 years ago. Sure, the greed of the rich and powerful was the catalyst to our misfortune, but the less powerful will suffer the consequences of the proverbial mushroom effect. It’s as if the crisis came and fell like tumbling blocks. All of the major banks announced problems one after another, and the hemorrhage couldn’t be stopped. The country just stood back, fastened the seat belt and waited to see the ending result. To document the incidents, Zarroli said” Bank of America purchased all Countrywide loans in 2008. Going into this acquisition they lost 40 Billion dollars and continued to offer subprime mortgages.” (p. 1). What kind of idiot does this? Taibbi said” Goldman and Sachs sold 5 Billion in 2008 of government back bonds to save the company because they couldn’t issue anymore debt. After the sale of the bonds, the stock fell from 200 to 47 per share.” (p. 1). Uuh! Da there were warning flags before the bonds were sold. Surely not last or least, Mamudi said” Citigroup laid off 11,000 employees in...