Deliverable 3 - Plan for Managing Operational FailuresCompetencyEvaluate the components of operational risk and the application of corresponding risk management plans.InstructionsLTD Acceptance is a private property and auto insurance carrier that specializes in sports cars and motorcycles. This organization is owned by LTD Capital, a large equity group with over 15 holdings. LTD Acceptance is the parent company's single largest holding as it drives 70% of total revenue. Due to the inherent risk involved in that segment of the market, many of LTD Acceptance's competitors do not offer policies for sports cars or motorcycles. This market segment is underserved which is why the organization has 20,000 active policies for a sports car or a motorcycle.LTD is headquartered in Houston, TX. LTD does not sell insurance directly to the public. Instead, it uses third-party agents to sell its policies. LTD handles all customer service needs including claims intake, policy services, and general questions. The company operates in four states: California, Texas, Louisiana, and Florida. Currently, LTD does not have an active system in place to ensure that its agents are in fact using LTD guidelines to screen potential policyholders. However, no evidence of negligence has emerged so far as the organization has yet to have a year in which it was not profitable. LTD has also had the good fortune of not suffering losses because of natural disasters or catastrophic events.Organizations in every sector experience breakdowns or failures that compromise the efficiency and efficacy of their operations. This concept is defined as an operational failure. Operational failures have a direct and adverse impact on profitability. As such, the shareholders want assurance that the risk management team is actively working on mitigating the occurrence of these failures. As the newly hired senior risk analyst, you are responsible for outlining a plan to do just that.For this deliverable, provide a report to your supervisor which provides a framework for managing operational risk exposures. Your report should include the following:Explain why the operational losses cannot be broadly managed. Why do they have to be categorized?For each operational risk exposure listed below, provide at least two examples of potential losses from the exposure and reasons why you need to manage it.Internal fraudExternal fraudEmployment practices and workplace safetyClients, products, and business practicesDamage to physical assetsBusiness disruption and system failuresYour conclusion should align the effective management of operational risk exposures with organizational effectiveness.The format for your report should be in the business, professional style. For help with this format, please click here.Grading RubricFFCBA01234Not SubmittedNo PassCompetenceProficiencyMasteryNot SubmittedNo explanation of why operational losses cannot be broadly managed is provided OR the explanation is not accurate.A brief explanation is provided that details why operational losses cannot be broadly managed.A thorough explanation is provided that details why operational losses cannot be broadly managed.A thorough explanation with specific examples is provided that details why operational losses cannot be broadly managed.Not SubmittedNo explanation of why operational losses need to be categorized OR the explanation is not accurate.A brief explanation of why operational losses need to be categorized.A thorough explanation of why operational losses need to be categorized.A thorough explanation, with relevant examples, of why operational losses need to be categorized.Not SubmittedFewer than two examples of potential losses are provided for any category OR explanation of examples were not provided OR examples are inaccurate.At least two examples from each category of potential loss are provided, including explanations of why there is a need to manage the losses.More than two examples of potential losses from each category are provided AND explanations of why there is a need to manage each.More than two examples of potential losses from each category are provided AND thorough explanations of why there is a need to manage each.Not SubmittedNo conclusion OR conclusion does not accurately show how effective management of operational risk exposures aligns with organizational effectiveness.Conclusion explains, but without examples, how effective management of operational risk exposures aligns with organizational effectiveness.Conclusion uses specific examples that show how effective management of operational risk exposures aligns with organizational effectiveness.Conclusion uses specific examples with full explanations that show how effective management of operational risk exposures aligns with organizational effectiveness.

Part 1Assume you are an accounting manager at a mid-size company. The CEO asks you to omit or leave out certain financial figures from the Balance Sheet that would reflect negatively on the company to investors and the public. Because this request does not involve a direct manipulation of amounts or records, would you agree to this request? What ethical considerations exist for you in determining a course of action?Incorporate concepts from this week’s lecture in your post. Your main post should be at least 250 words in length. Respond to at least two of your classmates’ posts.Part 2The IMA Statement of Ethical Professional Practice includes a confidentiality standard that requires members to “keep information confidential except when disclosure is authorized or legally required.” In the discussion of loyalty in chapter 1, a statement is made that “your ethical obligation is to report what you have observed to your supervisor and let her take the appropriate action.” Do you think there are any circumstances when you should go outside the company to report financial wrongdoing? If so, to what person/organization would you go? Why? If not, why would you not take the information outside the company?Incorporate concepts from this week’s lecture in your post. Your main post should be at least 250 words in length. Respond to at least two of your classmates’ posts.

 Deferred Compensation   Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a later date after which the income was earned. Examples of deferred compensation include pensions, retirement plans, and employee stock options. As the tax manager of a large corporation, you must understand and communicate the taxability of deferred compensation in order to be prepared to fully educate human resources on the implications to the company’s employees.   Research the topic and write a  paper in which you: Research the U.S. Tax Code to determine how your 401(k) deferred compensation is taxed. Determine whether the treatment is reasonable. Provide support for your conclusions. Assume that you have the authority to tax the current 401(k) contribution on the condition that you are not taxed upon distribution. Discuss the pros and cons of using this approach on both you and the federal government.  Propose an alternative to the taxation for the 401(k) deferred compensation that would be fair to all taxpayers and support the financial needs of the federal government. Indicate substantive ways in which your recommendation would achieve fairness to taxpayers and the United States Treasury.  Research recent IRS audit activities related to deferred compensation to determine the most frequent types of deferred compensation that would most likely trigger an IRS audit. Propose a strategy that you would use to defend a client facing an IRS challenge on deferred compensation.