Tyco International, the conglomerate whose former chief was convicted of looting the company, would pay $US50 million to settle accounting fraud charges, United States authorities said yesterday.

The penalty was for an alleged $US1 billion overstatement of Tyco results between 1996 and 2002 in an accounting fraud "orchestrated at the highest levels of the company", the US Securities and Exchange Commission said.

The lurid details of how former chief executive Dennis Kozlowski spent Tyco's money -on a $US2 million birthday party for his wife in Sardinia and a $US6000 shower curtain for his $US18 million Manhattan apartment, for instance - came to symbolise corporate excess during a time of scandals.

Kozlowski was sentenced for stealing more than $US150 million from Tyco in a case that also led to the conviction of former chief financial officer Mark Swartz.

The Bermuda-based Tyco said the $US50 million SEC settlement, the cost of which it had previously reported, closed the agency's probe of its former officials' accounting practices.

Tyco neither admitted nor denied wrongdoing, as is customary in SEC settlements. The SEC said Tyco inflated profit by at least $US500 million through improper accounting of some of the acquisitions it made from 1996 to 2002.

Required:

a. In this Tyco's case highest level of company executives were involved in criminal activities and stole from the company. Suggest steps & guidelines to prevent unacceptable practices.

b. Do you think management of company has an ethical and moral responsibility towards shareholders? Comment briefly.

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Question 1 (B)3 Marks

A number of companies now produce Corporate Social Responsibility reports. They are sometime also referred to as Sustainability reports.

Briefly comment on the three main sections covered in the report.