OUTPUT NO.

2:

ACTIVITY 1: WORD SEARCH

Instructions: Look and encircle the key words about Finance found in inside the box below.

A E I N V E S T M E N T X
E C Z Y E C O N O M I C E
T I C A P I T A L A F V X
H V Q O B M P P M N U M P
I R Q R U O F I N A N C E
C E A A S N U F G G C S N
A S T R I E T R A E T C D
L L N Z N Y R I Y R I I I
B W E Y E K H M N N O E T
T R E A S U R Y I G N N U
K M E T S Y S B N M S C R
M A R K E T I N G K B E E
Z I N S T I T U T I O N S
accounting ethical investment service
art expenditures manager system
business finance marketing treasury
capital functions money
economic institutions science

OUTPUT 3:
 ACTIVITY 2: EXPERIENTIAL ACTIVITY:

A. KEY CONCEPT OF FINANCE

Instructions: Answer the question in not more than 5 sentences.

1. Describe your understanding as to why finance is both a science and an art.

-Finance is both science and art. Finance is a science since it provides knowledge as to how and at what
time a firm should invest to outstrip other firms. On the other hand, finance is also an art. Art can be
defined as requiring a skill to conduct any human activity and as we are well aware, running a business
involves a multitude of skills. 

OUTPUT 4:

ACTIVITY 3: EXPERIENTIAL ACTIVITY:

B. ROLE OF FINANCIAL MANAGER

Instructions: Answer the question in not more than 5 sentences.

1. Describe the role of a financial manager.

- A financial manager has a lot of responsibility, meaning the role can feel hugely rewarding and
fulfilling. Financial managers generally oversee the financial health of an organization and help ensure its
continued viability. Their expertise in establishing a sound financial position is critical to an enterprise’s
ability to achieve its mission. 

OUTPUT 5:

ACTIVITY 4: EXPERIENTIAL ACTIVITY:

C. FINANCIAL INSTITUTION, INSTRUMENT, AND MARKET

Instructions: Answer the question in not more than 5 sentences.

1. Differentiate financial institution from financial instrument and financial market.

- They are all different except the fact that they are related to finance. You invest your money in financial
instruments. Financial institutions operate in the financial market and provide different services. Financial
markets are where financial instruments are sold and bought.

OUTPUT NO. 6:
 ACTIVITY 5: ENRICHMENT ACTIVITY:

SURF THE INTERNET ON ETHICAL ISSUE

Surf the internet and search for a business organization/company that has been or is currently involved in
corporate accounting scandal. Some of these corporate entities might be defunct by now.

Some of the corporate scandals include the following:

1. Enron scandal
2. WorldCom scandal
3. Arthur Andersen scandal
4. Lehman Brothers scandal
5. Tyco scandal

Then, gather and make a written report on the following:

a. company profile, total assets and revenues, organization, and operation.

b. how the scandal happened
c. amount of money involved
d. people who were involved and what happened to them
e. individuals who were affected

GATHER INFORMATION:

A. Company Profile, Total Assets and Revenues, Organization and Operation

Company Profile
 Founded by Arthur Rosenberg in 1960 and incorporated in 1962
 Products: Security Solutions and Fire Protections
 Headquarters
- Incorporation: Cork, Ireland
- Operational/Corporate: Princeton, New Jersey, United States
 Key People: George R. Oliver (CEO), Edward Breen (Chairman)
 A subsidiary of Johnsons Control (as of 2016)

 Total assets and revenues

The company has a Total Assets 11,614 Million dollars as of 2016 and total revenues of $36.39 billion.

 Organization
 Tyco International PLC was a security systems company incorporated in the Republic of Ireland, with
operational headquarters in Princeton, New Jersey, United States (Tyco International (US) Inc.). Tyco
International is composed of two major business segments: Security Solutions and Fire Protection.

 Operation

Tyco provides more than three million customers around the globe with the latest fire protection
and security products and services. Tyco has over 57,000 employees in more than 900 locations across 50
countries serving various end markets, including commercial, institutional, governmental, retail,
industrial, energy, residential and small business.

B. How the scandal happened

L. Dennis Kozlowski, 55, the son of a Newark police officer who as chief executive helped build
Tyco into an international conglomerate, and Mark H. Swartz, 42, his financial adviser and second-in-
command, are accused of using the money to pay for everything from an apartment on Park Avenue and
homes in Boca Raton, Fla., to jewelry from Harry Winston and Tiffany's.

According to Robert M. Morgehthau, the Manhattan district attorney, Mr. Kozlowksi and Mr.
Swartz created an elaborate, covert system beginning in 1995 that he called the ''top executives' criminal
enterprise,'' which, he said, allowed them to spend millions of dollars in company money for personal
expenses. The men then covered their tracks by limiting the scope of internal audits and bypassing the
company's legal department when filing disclosure documents with the Securities and Exchange
Commission. That is how all the fraud and theft started. Through the said secret enterprise, Kozowski and
Swartz were able to steal $170 million from the company itself and reaping $430 million more by
covertly selling Tyco stock while ''artificially inflating'' the value of that stock. Tyco stock has fallen 70
percent in value in year 2002, and it even closed at $17.80.

Among the accusations against Mr. Kozlowski are that he had the company pick up half the cost
of a multimillion-dollar 40th-birthday party on the Italian island of Sardinia for his wife, a former
waitress at a restaurant near Tyco's headquarters in New Hampshire. The New York grand jury
indictments -- including the charge against the former general counsel, Mark Belnick, 55, who was an
investigator in the Senate's Irancontra hearings in 1987 -- also accuse Mr. Kozlowski and Mr. Swartz of
bribing a Tyco board member and several Tyco employees, apparently to try to keep their scheme secret.
The indictment accuses Mr. Kozlowski and Mr. Swartz of ''enterprise corruption,'' a charge often used in
Mafia prosecutions. The charges against Mr. Kozlowski are in addition to a 14-count indictment handed
up in June that accuses him of evading more than $1 million in New York sales taxes on six paintings that
he said were going to Tyco's headquarters in New Hampshire. Prosecutors say the paintings actually went
to his New York apartment. He has also been charged with tampering with evidence by removing a
fraudulent cargo document from a file that was turned over to the Manhattan district attorney's office
during its investigation of the case.

Prosecutors said Mr. Kozlowski had misappropriated more than $270 million in loans, including
$12 million that he used to pay for his personal art collection. Prosecutors said he had borrowed $9
million to buy Boca Raton real estate and borrowed $7 million to buy an apartment for his wife as part of
a divorce settlement. Prosecutors also said Mr. Swartz had used $72 millions of Tyco loans, which were
intended to cover tax payments, to pay for an assortment of personal investments, business ventures, real
estate holdings and trusts. The suit also contends that he used $9 million in relocation loans to buy a yacht
and invest in real estate. All of the loans were later forgiven by the company, under the direction of Mr.
Kozlowski, prosecutors said. The authorities contend that Mr. Belnick received $14 million in no-interest
loans under a program that was supposed to pay for employees' moving expenses but was used, in part,
for the purchase of a $10 million vacation home in Utah and a $4 million apartment on Central Park
West. The loans were later forgiven. The indictment says Mr. Kozlowski and Mr. Swartz concealed the
cost of the forgiven loans by instructing subordinates to ''bury'' them in unrelated expenses for mergers
and other company business.

C. Amount of Money involved

The amount of money involved in the scandal is estimated to be at 150 million dollars stolen and
inflated earnings by 500 million dollars. There were secret loans, undisclosed compensations, undisclosed
related party transactions and fraudulent stock trading.

D. People who were involved and what happened to them

 Leo Dennis Kozlowski

Kozlowski joined the Tyco International in 1975 and later become the Chief Executive Officer in
1992. Under his leadership, the company expanded massively in the late 1990s. However, amid the
scandal in 2002, Kozlowski left the company.

He was convicted in 2005 of crimes related to his receipt of $81 million in unauthorized bonuses,
the purchase of art for $14.725 million and the payment by Tyco of a $20 million investment banking fee
to Frank Walsh, a former Tyco director.

His aggregate minimum sentence was set at 8 years and 4 months, and his aggregate maximum
sentence was 25 years; his conditional release date was set for May 17, 2022, and his maximum
expiration date was September 17, 2030. In April 2012, Kozlowski was denied parole. His next parole
eligibility date, and his parole hearing merit release appearance, were then set for January 17, 2014. On
January 17, 2014 he was granted conditional release from the Lincoln Correctional Facility in New York
City.

 Mark H. Swartz

Swartz was a Business executive and convict. As the former CFO of Tyco International, Mark
Swartz was convicted of looting the company of hundreds of millions of dollars to fund an extravagant
lifestyle. In 2005, a state court jury charged him with grand larceny, securities fraud, and falsifying
business records. He was sentenced to at least eight years and four months of prison and ordered to pay
$72 million in fines and restitution.

 Mark A. Belnick
 Former Tyco International Ltd. general counsel Mark A. Belnick, accused of taking a $17
million bonus as a reward for helping conceal corporate wrongdoing, was acquitted of all charges in
2004.

E. Individuals who were affected

The complications in Tyco’s case involved people other than Kozlowski. Kozlowski recruited the
support of other high-ranking officers in the organization. He also convinced some lower ranking
employees to keep their silence in exchange for financial benefits. Also, Kozlowski convinced one of the
board members to keep silent about the illegal financial transactions on the mansion Tyco paid for the
benefit of Kozlowski and his wife. In exchange, the board member received financial benefits.

WRITTEN REPORT:

Tyco International has operations in over 100 countries and claims to be the world's largest maker
and servicer of electrical and electronic components; the largest designer and maker of undersea
telecommunications systems; the larger maker of fire protection systems and electronic security services;
the largest maker of specialty valves; and a major player in the disposable medical products, plastics, and
adhesives markets. Since 1986, Tyco has claimed over 40 major acquisitions as well as many minor
acquisitions.

According to the Tyco Fraud Information Center, an internal investigation concluded that there
were accounting errors, but that there was no systematic fraud problem at Tyco. So, what did happen?
Tyco's former CEO Dennis Koslowski, former CFO Mark Swartz, and former General Counsel Mark
Belnick were accused of giving themselves interest-free or very low interest loans (sometimes disguised
as bonuses) that were never approved by the Tyco board or repaid. Some of these "loans" were part of a
"Key Employee Loan" program the company offered. They were also accused of selling their company
stock without telling investors, which is a requirement under SEC rules. Koslowski, Swartz, and Belnick
stole $600 million dollars from Tyco International through their unapproved bonuses, loans, and
extravagant "company" spending. Rumors of a $6,000 shower curtain, $2,000 trash can, and a $2 million
dollar birthday party for Koslowski's wife in Italy are just a few examples of the misuse of company
funds. As many as 40 Tyco executives took loans that were later "forgiven" as part of Tyco's loan-
forgiveness program, although it was said that many did not know they were doing anything wrong. Hush
money was also paid to those the company feared would "rat out" Kozlowski. Essentially, they concealed
their illegal actions by keeping them out of the accounting books and away from the eyes of shareholders
and board members.

In 1999 the SEC began an investigation after an analyst reported questionable accounting
practices. This investigation took place from 1999 to 2000 and centered on accounting practices for the
company's many acquisitions, including a practice known as "spring-loading." In "spring-loading," the
pre-acquisition earnings of an acquired company are underreported, giving the merged company the
appearance of an earnings boost afterwards. The investigation ended with the SEC deciding to take no
action.
 In January 2002, the accuracy of Tyco's bookkeeping and accounting again came under question
after a tip drew attention to a $20 million payment made to Tyco director Frank Walsh, Jr. That payment
was later explained as a finder's fee for the Tyco acquisition of CIT. In June 2002, Kozlowski was being
investigated for tax evasion because he failed to pay sales tax on $13 million in artwork that he had
purchased in New York with company funds. At the same time, Kozlowski resigned from Tyco "for
personal reasons" and was replaced by John Fort. By September of 2002, all three (Kozlowski, Swartz,
and Belnick) were gone and charges were filed against them for failure to disclose information on their
multimillion dollar loans to shareholders.

The SEC asked Kozlowski, Swartz, and Belnick to restore the funds that they took from Tyco in
the form of undisclosed loans and compensations.

Kozlowski and Swartz were found guilty in 2005 of taking bonuses worth more than $120 million
without the approval of Tyco's directors, abusing an employee loan program, and misrepresenting the
company's financial condition to investors to boost the stock price, while selling $575 million in stock.
Both are serving 8 1/3-to-25-year prison sentences. Belnick paid a $100,000 civil penalty for his role.

The difference in the Tyco case and some of the others is that it is more related to greed than
accounting fraud.