- There is an important distinction between the understanding and predisposition that attend ‘doing one’s job right’ and knowledge of the underlying business. Hypothetically, one can understand how transactions are routinely accounted for in the entity (e.g., foreign exchange purchases / sales on behalf of clients), including not asking questions indicative of cynicism (aka not acting like a team player and ‘being unproductive’) and knowledge of the integrity of the transactions (e.g., are clients intentionally overcharged through bid rigging?)
- Venue is highly underrated. Outsourcing work to low cost locations has other costs, some borne internally (e.g., costs attendant to inadequacy of understanding of the culture of the entity’s employees and laws and customs in effect in the entity’s prevailing reporting regime such as the U.S. Foreign Corrupt Practices Act, U.S. Sarbanes-Oxley Act, etc.), and some borne by external parties (e.g., pollution inadequately regulated by the jurisdiction in which the outsourced work occurs).
- Unfortunately, transparency is for the ‘other guy.’ Gaming is a central feature of modern economics (e.g., high frequency trading and related algorithms), and games of skill and chance (e.g., poker) require the principal to act secretly and encourage the principal to gather as much information about the other players’ hands as he/she can without getting kicked out of the game (e.g., for cheating / fraudulent conduct detected and punished).
- Innumerable deals are made on the basis of maximizing significant influence (e.g., hiring princelings in China – a practice that is not restricted to foreign venues). Alternatively, no one was ever fired for recommending for hire one of the ‘Big 4’ public accounting firms to audit his/her entity’s financial statements. Nothing is more appealing to dealmakers than expansion of their networks of resources (e.g., financial). This principle may hide under the phrase ‘economic rationalism.’
- Do not purchase any publications in which either of the following two conditions are true: 1) Comments are often not allowed in the website’s work products / articles; or 2) Comments are generally inferior to the quality of the publisher’s work products / articles. Where comments are not allowed, fear of exposure is often at play. Where comments are indicative of naive / low information individuals, support of the publisher merely encourages more of the same.
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