Instructions: Apply these below instructions for the topic below and provide answer with 150- 200 words in APA format
1. Challenge something that has been posted
2. Pose a related question or issue
3. Suggest a different perspective or interpretation
4. Pull in related information from other sources with proper citation - books, articles, websites, courses, etc.
Please read below:
Part 1: Financial Acumen
Business acumen, also referred to as commercial or financial acumen, is defined as an intuitive and applicable understanding of how a company makes money and is critical to effective strategy execution(bts.com).
In simple words, it is the measure of how well a person or an employee understands the financial model of the company like where is it getting money from and where is it spending money. Acumen as defined biblically is the ability to make good judgmental decisions, which also gives a better or sharper edge over the subject or the concept (Vorbach, 2017). Financial acumen can be achieved by rigorous experience and learning process in through the professional tenure.
Individuals with solid business intuition utilize an express or understood business system to guarantee culmination and combination as they evaluate a business circumstance.
The system connects the destinations of key partners, the focused procedures required for progress, the general population and exercises expected to create and offer items and administrations, and the business forms that help a supervisor's capacity to manage the intricacy. The system is strong and along these lines by and large pertinent to a wide range of business movement. In a specific business, this system is frequently alluded to as the plan of action. (lexicon)
Discuss the benefits of establishing solid financial acumen in a company? Discuss your personal experiences in a situation where financial acumen was either not supported as an organizational hallmark or, conversely, was built into the company's culture.
We have seen and understood from the above discussion how financial acumen experience can help a company in many ways. So, the base for a solid financial acumen is to possess the following areas of expertise.
· Experience: You have to have some experience at dealing with data, tracking expenses and income, and figuring percentages for taxes, sales revenues and inventory shrinkage.
· Expertise: You have to develop expertise in Financial domain
· Judgment: You have to be judgmental in making any big decisions.
· Troubleshooting: Ability to learn from more problems.
Coming to my personal experience of companies having solid financial acumen I would like to quote my company American Express which is a fortune 500 company. Our ex CEO Ken Chenault was a graduate from Harvard. He had vast knowledge on the business domain and he had good leaders in his team as well.
Groups that do surely know the commercial center and their situation inside it; utilize monetary reports and measurements to screen their execution and make alterations; and grasp how their choices affect the general business framework. When building business keenness for yourself or your group, center around building up every one of these related capabilities keeping in mind the end goal to develop your skillbase. So he made sure American Express was always in the path according to the market.
Part 2: Sarbanes-Oxley (SOX):
The Sarbanes-Oxley Act (SOX) became effective in 2006 and was implemented to hold all US corporations accountable for their internal financial auditing controls to the Securities and Exchange Commission. This federal law was passed in response to a number of major corporate and accounting scandals.
The Sarbanes-Oxley Act itself is organized into eleven sections, but sections 302, 404, 401, 409, 802 and 906 are the most important in terms of compliance. Failure to comply with regulations can result in fines up to $10 million and 30 years in prison for a corporation. (Significance of SOX Compliance)
Each monetary emergency or misrepresentation brings or requests ad lib in stores distribution. This procedure is repeating which gives the market a space to revision and improvement.
History demonstrates that estimates taken after such issues happen, are unmistakably compelling when contrasted with the ones amid general business. One such activity is the Sarbanes-Oxley Act or SOX presented in 2002 in view of Sen.
Sarbanes from Maryland and Oxley from Ohio (Slaughter, n.d.). The basis of the acquaintance of this demonstration is with bring speculator certainty by changing and enhancing organization detailing techniques or measures. With the production of oversight board now the organizations were required to report inward control reports each one to three years alongside their customary reviews.
The arrangements of this demonstration were that it furnished the speculators with greater lucidity on their ventures while protecting them from the fakes seething here.
The implementation of this demonstration in Section 404 augmented the review point of view while expanding the possibility of examining as well as upholding a law which reports straightforwardness. The SEC respected this as they are included too all things considered, which gives them an upper edge over the organizations arranging fake exercises. The key advantage is that it shields the American market from worldwide defects which until before this presentation could harm the U.S advertise at little and mid-level also.