In the tampering of an investigation of bankruptcy or fraud, an individual can be sent to prison for up to 20 years. Failure to comply with the SEC’s rules on record keeping could carry a sentence of 10 years (Carmichael et al., 2007, p.19). With the enactment of the Sarbanes-Oxley Act, overall, investor confidence with auditors in the U.S. has been
This act was signed by President Bush after the financial scandals revolving around Enron, Worldcom, amongst others. People want to know, why was there not one single arrest of a high ranked executive following the biggest market crash in history. Sarbanes Oxley was supposed to help prevent this kind of disastrous situation. During the crash, executives from Countrywide mortgage amongst other bankers packaged toxic securities and sold them to their customers knowing that they were practically worthless. These subprime mortgage derivatives were the entire center of the meltdown that resulted in millions of jobs being lost, and millions of lives ruined.
You decide week 6 The stock should not be purchase by Mr. Jones. Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation, would, be the results of the purchase. In lay terms, he has bought the existing Smithon Corporation and he is responsible of ensuring daily operations run efficiently but the tax aspect of acquisition he is responsible for existing and any future tax liabilities that the selling corporation had. It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock. Since the tax identity of Smithon corporation would have not ceased, it is not
Possibly the most important showdown was the debt-ceiling fight of August 2011. It “threatened the country's ability to meet its financial obligations and resulted in an unprecedented downgrade in the U.S. credit rating by Standard and Poor's. The subsequent failure of the bipartisan super-committee to reach a deal on $1.2 trillion in targeted budget savings over ten years unleashed automatic spending cuts for both defense and non-defense spending”
IRS Controversy: What's the potential fallout? Yes, this news story goes in-depth and breadth. It goes around the controversy of the IRS saying that the IRS has ineffective management" led to IRS tea party targeting. "Despite repeated calls for cooperation, the agency failed to be completely truthful in its responses to the Committee during its nearly two-year long investigation of this matter, and in testimony before the committee," they wrote (Condon, May). While under the investigation the IRS has led Congress to believe that after lawmakers question the IRS over the undue scrutiny the agency put on conservative groups that filed for tax-exempt status during the 2012 elections, they'll want to take action -- to hold people accountable and eventually consider legislation to amend any systemic problems that led to this kind of political discrimination.
This was the first audit that ZZZZ Best had as a public company and the mistake involved the inspection of the insurance restoration sites. Mr. Greenspan had talked with Tom Padgett, and even though Mr. Padgett confirmed the insurance contracts were real and showed proper documents to back them up, Mr. Greenspan never actually inspected any of the actual insurance restoration sites. Had the sites been checked, Mr. Greenspan could have stopped the scam from ever hurting the public stockholders. After looking at this mistake, Greenspan should have made it a very high priority to inspect the insurance sites, especially because they amounted for such a huge percentage of income for ZZZZ Best. The second mistake involved Ernst & Whinney, which was the auditor for ZZZZ Best after Greenspan was let go.
Kevin Pfeiffer, a computer technician on new hire probation, was asked to act unethically in regards to an insurance claim. He made an ethical decision to not participate in the unethical practices of insurance fraud carried out by the organization. Kevin’s manager, Antonio Melendez was familiar with the rumors of the alleged insurance fraud; however, this was the first time a fraud situation was brought to him directly. This analysis will focus on the ethical dilemma faced by Antonio and discuss strategies for addressing the situation. Analyze the ethical dilemma faced by Antonio The ethical dilemma that Antonio faced was weather to report the issue to the proper corporate officers himself, have Kevin Pfeiffer make his own decision regarding the issue, or ignore the issue altogether because the insurance proceeds will benefit the organization as a whole.
During an investigation there were many questionable accounting transactions that were brought up, such as large executive bonuses as well as many loans for large amounts of money that were later forgiven without repayment. Kozlowski and Swartz were sentenced to 8 – 25 years in prison ("Investopedia", 2014). Then a lawsuit against Tyco cost the company $2.92 billion in repayment to its investors ("Investopedia", 2014). The biggest issue here was allowing for a CEO and CFO to have too much access to funds. A protocol should be in place that when a sale of stocks is made and no one authorized it then a full audit should take place from a third party or if a loan is going to be made then more then just the CEO and CFO’s approval needs to be given.
Inside job is a an angry, well-argued documentary that helps us to have a clear look at how the biggest financial crisis of the history took place that shook every other economy to its very core. The story begins in Iceland, a stable democratic society described as almost attaining ‘end of history status’. This small, prosperous state of 320,000 people became a basket case almost overnight when its three main banks were privatised and began borrowing three times the country’s Gross Domestic Product with the capital mostly accumulated to incredible levels by bankers. The story then moves to the US and the collapse of Lehman Brothers in 2008 that sent shudders through the financial markets and sparked a global downturn that would shed 30 million
There can be a lot of factors as to why companies file for bankruptcy and closure. In the case of Enron, the first set of problems in the company manifested when traders reluctantly gambled with company assets in the oil market. They lost $90 million in a period of five days. Since then company reserves disappeared and auditors saved the company by reporting fake net worth and imprecise trading revenues resulting to accounting scandals in the company. Due to the company’s compound business model and unethical practices, they required that the balance sheet is to be modified accordingly to illustrate satisfactory