If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain.
Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field. Prepare a 350- to 1,050- word paper detailing the findings of your discussion. Week 1 DQs Many professional accountants believe that the main purpose of accounting standards is to protect the public. With that in mind, what do you think are the main objectives of the AICPA code of professional conduct and how does the code relate to protecting the public? Be specific A bookkeeper makes a significant posting error, which she later discovers and corrects.
Khristine Jackson Week 2 Homework July 19, 2014 The Sarbanes-Oxley Act of 2002 (SOX) was a direct output of the financial statement fraud that sank industry giants such as Enron and WorldCom. 1) What are the primary goals and tenets of SOX with respect to fraud? The primary goals and tenets of the Sarbanes-Oxley Act of 2002 (SOX) are to concentrate on improving the value of audits in an effort to remove fraud in order to keep the public’s attention as well as for the security of investors. In addition, SOX requests corporate management to be more accountable for both fraud prevention and detection. Similarly, corporate board is also more responsible for the occurrence of fraud with the company; under SOX, those who contribute in
Protects investors. Sox was created to reduce statement fraud, after the fraud scandal by Enron and WorldCom. It was created to establish higher standards in companies accounting procedures. To make sure that the information provided in the financial statements is accurate. Also to be able to penalize the individuals responsible for the fraud and to provide protection to the individuals that provide information about fraud committed in the companies.
Discuss how the Sarbanes-Oxley Act is likely to affect the CEO's and CFO's of public companies. The Sarbanes-Oxley Act Section 302 Rules 13a-15(a) and 15d-15(a) under the Exchange Act: Corporate Responsibility for Finical Reports requires that a statement be prepared to accompany the audit report signed by the CEO's and CFO's of public companies to certify that that the reports their companies file with the Securities and Exchange Commission are both accurate and complete and certified stating it’s "appropriateness of the financial statements and disclosures contained in the periodic report, and that those financial statements and disclosures fairly present, in all material respects, the operations and financial condition of the issuer." (White & Case LLP, 2003). The CEO/ CFO of public companies are required to have full knowledge of the SEC standard, pledging ignorance is not an option, if they do not meet their obligations under section 302, they can be found liable and can face litigation that could include a forfeiture of pay and bonuses under
Financial Analysis A company’s strengths and weaknesses are better understood by their financial statements such as Income Statement, Cash Flow statement, and Balance sheet. As Financial consultants, our goal is to help CanGo understand their financial statements and where CanGo needs to improve to gain the competitive edge in the market. Every company needs to understand their own financials before analyzing the market or industry. After analyzing CanGo’s efficiency ratios, we found them to be very un-attractive for investors. For example, CanGo has a very high receivables turnover rate.
The offenses are harmful to not only businesses in the United States of America but to the world of business as a whole and are unacceptable. If the law had been in place, many shareholders would have been safeguarded but numerous investors lost their lifetime savings by company insiders. The corporate world is a much more secure place with regards to investing with all of the changes and modifications which are now enforced. I still think there are other actions which can be taken to protect shareholders even though the modifications have significantly improved the procedure. Businesses must develop an ethical balance so as not to take advantage of unknowing shareholders who have invested their lifetime
There were also unethical issues involving the entity that was supposed to secure and watch over those that are investing our money. That entity, known as the Securities and Exchange Commission, failed to properly investigate certain claims that were made against Madoff long before this scheme broke wide open. The SEC was warned numerous times about the inconsistent information from Bernie Madoff. Ethical misconduct within this case has made more investors aware of what is needed besides forking over large sums of money and charitable contributions to someone who claims they are doing the work of the people. Investors now know that it is also their job to challenge and be more “in tune” to what their money is doing and how their money is working.
SOX Reforms Corporate America The Sarbanes-Oxley Act of 2002 (SOX) enacted July 30, 2002 introduced significant changes to financial practice and corporate management regulation. Passed in the wake of numerous scandals SOX is a complex piece of legislation that requires companies to make major changes to bring their organizations into compliance (Bumgardner 2). Many believe this act has not proven worthy and will not change effect in the business world, but I think this act will help businesses and outside investing. The act holds top executives personally responsible for the accuracy and timelines of their company’s financial data — under threat of criminal prosecution. Sox address weaknesses with internal issues, requiring yearly
If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind. Just throwing money at the banks will not get the job done.” In reference to “Bailout Nation”, Wolfson proves that bailing out large insolvent banks hurt the taxpaying people. He brings to light where the people’s money really goes, and how it’s