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
“Fictitious sales most often involve fake or phantom customers, but can also involve legitimate customers” (Wells, 2011, p. 7). Certain events, such as unusual growth in accounts receivable days are red flags to fictitious revenue schemes. According to the Apollo Case, the company shipped a shipment of shoes worth over $3.1 million to a company called Mall-Wart. During the audit, the auditor found the amount owed appears correct, but there was no order placed for that shipment. Mall-Wart has entered into bankruptcy the month before and they informed Apollo Shoes, Inc.. To verify the validity of this transaction, the investigator needs to collect some evidence.
It is possible to make sound hypothesis, based on less detailed information. Variables and fluctuations happen and are a normal part of life. These steps follow a specific order that is considered the ideal rational for decisions (Group/Individual, 1999-2000). The other weakness in this model is it is time consuming. A lot of research goes into making business decisions but if for each decision, one had to follow the Bazerman and Moore’s six-step model even less would get accomplished.
http://www.state.nj.us/lps/ca/laws/accountancyregs.pdf Allison, Ed and McClintic, Marion. "Ethics in Accounting." Encyclopedia of Business and Finance. The Gale Group, Inc., 2001. eNotes.com. 2006.
The Case of Bernard Madoff Case 5 Problem Statement: Fraud Summary : This case closely encompasses how Bernie Madoff was accused of creating a scheme that destroyed $65 billion in investments. He single handedly deceived thousands of people including auditors, accountants, and regulators. His scheme deceived so many intelligent people and regulators considered him legitimate. His family, auditors and employees have been under investigation to find out who helped and benefited from Madoff's scheme. Madoff claimed he was the only one at fault however his right hand man explained that numerous businesses new about his scheme and still accepted it and openly violated the law.
If they are interrupted they could cause major problem for the business. It reminds me for the Y2K scare when people where pulling money out of the banks because they did not know what was going to take place when we turned to 2000. 2. Can any product or service be marketed globally? If it sells in the United States, does it sell in another country?
I would change the administrative passwords on all systems routinely, implement a firewall program with remote access control which will not allow, hackers entry to your company’s system. Without passwords being assigned to data and systems, this simply protection becomes a target for hackers. Identity theft occurs in some of the largest companies and often times this security breach is kept quiet. This company has been hacked for customer’s birthdates twice in one month. This means that they are experiencing severe vulnerabilities and they need to take action immediately.
Sarbanes-Oxley Law Stephanie Mosley ACC 340 University of Phoenix Richard Calabria 07/23/2012 To enhance the dependability and accountability in an effort to safeguard shareholders, the federal government for the United States of America established the Sarbanes-Oxley Act on July 30, 2002. The Public Company Accounting Reform and Protection Act of 2002 is also used to refer to this law. Numerous acts of corruption in the business sector continued throughout the late 1990s as well as early part of 2000 with no laws to prevent it. In response to the very public case of WorldCom and Enron fiscal scams, the Sarbanes-Oxley Act of 2002 (commonly called SOX) was passed to protect the public and investors from unfair practices and accounting mistakes (Rouse, 2007). In order to safeguard shareholders, the president at that time President George Bush pushed for the act to get passed by the Senate and House of Representatives.
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.
Technology Risk Presentation Tammy Radcliffe XACC/210 • Limitations of Technology for E-Business System Technology is crucial in the daily operations of any business. Production of services is related to the technology used and it encourages an increase in productivity. Upgrades in technology gives an organization advantage to the competition. This could be cost effective to the organization compared to hiring new employees and paying high salaries in the long run. Technology has had several downfalls as well.