Sarbanes Oxley The Sarbanes-Oxley act is a United States federal law. This law was created to improve reliability and accuracy of financial documents. The official law is known as the Public Company Accounting Reform and Protection Act in the Senate and Corporate and Auditing Accountability and Responsibility Act in the House. It was passed into law on July 30, 2002. The ultimate goal is to protect investors.
Known also as Black Tuesday, October 29th left stockholders shattered with recorded losses reaching $40 billion dollars (Kelly, n.d.). Many banks and financial institutions began collapsing which led to irretrievable, uninsured deposits and savings. Fearing further loss, people began spending less which led to a decrease in production and an increase in unemployment. As companies began to fail, the government devised the Smoot-Hawley Tariff in order to protect American businesses. The Tariff placed high taxes on imports leading to a decline in international trade.
6, 2008. In an already tumultuous market the preferred stock of the two firms tumbled to below a dollar. September 2008 was the month that saw the fall of many financial institutions. Banks termed too big to fail. Lehman Brothers file bankruptcy, Merrill Lynch was bought out by Bank of America, and AIG, an insurance company that sold insurance to investment banks to cover the downturn of investments, was on the brink of financial distress along with so many other failing financial institutions.
1. The Enron debacle created what one public official reported was a “crisis of confidence” on the part of the public in the accounting profession. List the parties who you believe were most responsible for that crisis. Briefly justify each of your choices. Out of the many parties in the league and the major force behind the debacle of Enron concern Andersen's, the accounting and auditing firm that once deserved name in the industry for its conscience in accounting professional services and auditing.
The Sarbanes-Oxley act was passed in 2002, it was a direct result of the major corporation scandals that happened a few years prior involving Enron, Tyco, and WorldCom. This act was put in place in order to protect business shareholders and the general public from documentations error and manipulation. The Sarbanes-Oxley act covers all forms of documentation and any violators that do not follow the rules and regulations of this act are dealt with accordingly. All people handling documents and correspondence must follow three guidelines. The first rule speaks on consequence of destroying, concealing, mutilating, or falsifying information.
The central compliance issue that they are working to curtail is their many violations of the Servicemembers Civil Relief Act (SCRA). Since 2003, the company has undergone scrutiny about overcharging servicemembers and recently returned servicemembers from active duty, which caused many of the servicemembers to face the possibility of a bank foreclosure. When this issue was brought to the company’s attention, J.P Morgan Chase identified two problems. The first was the fact that four thousand-five hundred servicemembers were charged interest and fees that were way above the regulatory cap. Secondly, J.P Morgan Chase
On Black Thursday, The Wall Street Crash of 1929, October 24 also known as the Great Crash was terrible, it was the worse stock market crash ever. The market crash was one of the major causes that led to the Great Depression. There was a huge crowd of people trying to withdrew there life saving but couldn't. They were left with loans and debt they couldn’t pay. Two Months after the crash , stockholders had lost more than $40 billion dollars.
We have downfall and then we pick things back up and everything gets better. But , just when things get better, it happens to get worse again. Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars.
The mortgage crisis and bank bail out of 2008 were at the fault of the American government. Society, public opinion and the mass media were largely affected. The jobs of the Congress were also turned around since a lot of focus has been on fixing the banking and mortgage issues due to the meltdown from 2008. As a result our society has suffered a major economic downturn. In some areas, the government popularity level has lowered significantly.
Sky rocketing the company as the sixth-largest energy company in the whole world. However during 2001, due to unstable leadership and financial mistakes. Enron began to collapse and filed for bankruptcy. Labeled as one of the biggest case of bankruptcy the U.S. Justice Department released an investigation regarding the company’s transactions. During the investigation, CEO and former CEO Lay and Skilling faced up to 40 charges including conspiracy, making false statements on financial reports, securities fraud and wire fraud.