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New Century Financial Corporation - Book Report/Review Example

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The author of this book review "New Century Financial Corporation" focuses on the management, one of the principal concepts in businesses and organizations. It is stated that it is the function that ensures the coordination of peoples’ efforts in order to accomplish objectives…
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New Century Financial Corporation
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Download file to see previous pages However, the management team of New Century Financial Corporation has not observed the rules and guidelines of good management (Palepu, Sesia, and Srinivasan 58). The company is experiencing a drop in their capital resources because they have not properly managed and maintained accounting procedures and policies that would enhance their consistency and accountability.
Efficient accounting policies and procedures serve as training and assessment tools for the entire staff. Communication is one of the essential components of the internal control model. A good manager ensures that they communicate to their staff the company’s policies and procedures to make sure that the entire staff is “on the same page.” This will enhance understanding between the accounting department and other departments in the company, however, the report presented affirmed that lack of collaboration between Senior Management and the Board of Directors of the Company led to the catastrophic exist if the company from the market. (Palepu, Sesia, and Srinivasan 61). A good business requires effective working conditions between all of its departments. It is always healthy for a business whenever all its departments have a mutual understanding. Without efficient communication and proper internal control of resources, a company is sure of dropping in its profits.
The first three quarters of 2006 saw New Century Financial Corporation be the second largest originator of subprime residential mortgage loans ((Palepu, Sesia, and Srinivasan 59). The company was increasing its worth and profits. It had generated $367 million in the first year of 1996 to almost $60 billion in 2006. The company had a market capitalization that was over one billion dollars in 2007 and a credit facility of $17.4 billion that it could finance its operations or activities. The company recorded net earnings of $411 million for the year 2005, and net earnings of $276 for the first nine months that ended in September 30th, 2006, but all this dropped due to the push and pull forces between the Senior departments and the Board of Governors, leading to the collapse of one of the most successful companies. ...Download file to see next pagesRead More
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