...Sarbanes-Oxley Act (SOX) of 2002 Topics Covered: How SOX affects the following: CEO’s and CFO’s of Public Companies Outside Independent Audit Firms SOX section 404 on Internal Control The Main Advantages and Disadvantages of SOX Executive Summary The Sarbanes-Oxley Act of 2002 (SOX) was intended to create more transparency in financial reporting and to combat the perceived inflation of CEO compensation. To do this, the act required that a board of directors be financially independent from the CEO and have no familial ties. It also required the CEO and CFO to personally sign all quarterly and annual reports submitted to the SEC and provided for criminal penalties if this was not done. Our research indicates that Sarbanes-Oxley has created more transparency in the system, but it has actually had the opposite effect than was intended with regards to CEO compensation. The research indicates that CEO compensation has increased for many companies post-Sarbanes-Oxley. Due in large part to the Enron scandal, SOX needed to address outside independent audit firms to improve the accuracy of financial reports disclosed by publicly traded companies. These financial reports are used by investors, bankers and interested consumers to determine how well an organization is doing and provide investors with vital information about a company’s performance. This paper will discuss the Sarbanes-Oxley Act and how the SOX law affects outside independent audit firms. Next we review...
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...SOX Act of 2002 ACC/561 UOP SOX Act of 2002 On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession. (Securities Exchange Commission, 2014) Over the years, there have been multiple fraud cases involving businesses’ accounting practices. Some of the motives range from misleading potential investors about the company’s earning to attract more investors and get more funding from banks to corporate executives taking a little more cash home in salaries, plus avoiding taxes to increase profits. The SEC was created to enforce statutes such as the Sarbanes-Oxley Act and others to try to prevent the massive amount of fraud that has been on the rise. Even after all these measures have been put forward, more than half of U.S. organizations that experienced fraud in the past two years reported an increase in the number of occurrences, according to a new survey by PricewaterhouseCoopers that also found a rise in accounting fraud, bribery and corruption, with cybercrime moving to the forefront of U.S. companies’ concerns. (Cohn, 2014) One of the...
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...SOX Act of 2002 Joseph Holmes LAW/421 May 11, 2015 Gregory Henderson University of Phoenix Material Article Review Format Guide MEMORANDUM UNIVERSITY OF PHOENIX DATE: May 11, 2015 TO: Gregory Henderson FROM: Joseph Holmes RE: Year-old Law's Not Enough To Quell Some Investors' Distrust; By Rafael Gerena-Morales and Purva Patel Business WriterS July 30, 2003 ARTICLE SYNOPSIS Looking into many of the surveyor’s opinion they all feel that even with the new Sarbanes-Oxley Act they still cannot trust the market. They still feel that there are loop holes that companies have to still cheat the system. For reluctant investors, Sarbanes-Oxley aims to help them believe the force of law will fortify accounting standards and reduce the opportunities for executives to falsify financial reports that sway stock prices. Even though that this Act has only been working for a year it will take time in order for it work. It has not established any credibility because there has not been any law suits that have gone through any courts yet. Of course there is going to be a distrust between investors and the new established Act. LEGAL ISSUE The legal issue is that the Act has yet been able to get any credibility because it was barely established. “Charles Harper, who ran the Security and Exchange Commission's Miami office for 14 years until 1994, said investors will have to be patient because white-collar crimes can take months if not years to investigate...
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...Sarbanes-Oxley Act (SOX) of 2002 LAW/412 July 25, 2014 Instructor Jacques Ward Congress Should Repeal the Sarbanes-Oxley Act Most commentators agree that the SOX Act provided the most sweeping and comprehensive amendments to the ’33 and ’34 Acts in securities law history. (Melvin, 2011 pg. 423) On the other hand, William A. Niskanen believed different. Individuals found it difficult to swallow the Act because it was believe to only be enacted so government official could feel better about confronting only a few points of popular concern instead of resolving the matter. According to Niskanen the SOX act of 2002 is unnecessary, harmful, and inadequate (Niskanen, 2006). Lengthy terms of incarceration and seizure of personal property are penalties under the SOX Act. The act was viewed as unnecessary because the stock exchange had already put into action a policy to address most of the problems given in the SOX Act. Those policies include accounting standards, prosecution for fraud, audits, and financial reporting procedures. Officials believed that both acts handled the same issues. Therefore; congress should deem the SOX act of 2002 unnecessary. The SOX act of 2002 was regarded as damaging because it would “reduce the incentive of corporate executives and directors to seek legal advice” (Niskanen, 2006). It was also seen as prejudicial because it created prohibitions on loans to corporate officers that would create complications for reparation. The act was considered to...
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...Auditor independence refers to the position of the external auditor’s level of personal and financial ties to a particular organization which can sometimes be complex. When deciding whether to accept an auditing engagement, one must judge their independence and objectivity. This is why integrity is imperative in business, especially within the world of audit. Congress passed the law, The Sarbanes-Oxley Act of 2002 (SOX) that applies to publicly held companies and their auditors. It was intended to protect investors by improving accuracy within the laws of the government (SEC, 2001). In addition, it also assists in prevention of financial statement fraud and make items more transparent for protection of the organization. To achieve these parameters,...
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...In 2010, Harold purchased a new condominium for $ 70,000 to use as his principal residence. Harold files as a single taxpayer. What is Harold's first-time home buyer credit in the following alternative situations? a. Harold purchased the condominium on February 1, 2010. Harold has lived in an apartment he rented since 2002. Harold's 2010 AGI is $ 60,000. The answer is: $ 7,000 ($ 70,000 × 10%) because Harold purchased the home before May 1, 2010 and he did not own a home in the previous three years, Harold may claim a credit equal to 10% of the purchase price (total credit may not exceed $ 8,000). b. Harold purchased the condominium on February 1, 2010. Harold has lived in an apartment he has rented since 2002. Harold's 2010 AGI is $ 135,000. The answer is: $ 3,500 ($ 70,000 × 10% × 50%) because Harold purchased the home before May 1, 2010 and he did not own a home in the previous three years, Harold may claim a credit equal to 10% of the purchase price (total credit may not exceed $ 8,000). However, because Harold's AGI is half way through the phase-out range for the credit ($ 125,000 - $ 145,000), he loses half of the credit he was otherwise eligible to claim ($ 135,000 is half way in between $ 125,000 and $ 145,000 so he loses 50% of the credit). c. Harold purchased the condominium on February 1, 2010. In the six years preceding this purchase, Harold lived in another home he owned. Harold sold that other home on March 1, 2010. Harold's 2010 AGI is...
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... July 14- A geomagnetic storm is caused on Earth by a solar flare. August 14- Dora the Explorer debuts. December 15- The Chernobyl Nuclear Power Plant is shut down completely. 2001 January 15- Wikipedia launches on the Internet. January 20- George W. Bush becomes the president of the United States. June 19- A malfunctioning Iraqi missile hits a soccer field, killing 23. July 2- The world’s first artificial heart is implanted. September 11- Four U.S. commercial airliners are hijacked by terrorists. Two were crashed into the World Trade Center towers, one into the Pentagon, and one into an open field in Shanksville, PA. November 10- The Peoples Republic of China is admitted to the World Trade Organization. 2002 January 8- The No Child Left Behind Act is approved by President Bush. February 28- The past currencies of all European nations...
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...default over the next twelve months. Also, a company with a 2% EDF credit measure is 10 times more likely to default than a firm with a 0.20% EDF credit measure. Letter ratings are for comparison purposes only--a point of reference to improve interpretation of default probabilities. • EDF credit measures range from a low of 0.02% to a high of 20% in one basis-point increments. A basis point = 1/100 of a percentage point. July 2001 July 2002 UAL posts a $341 million second-quarter loss. • • • UAL and US Airways call off merger after U.S. Justice Department says it would block merger on antitrust issues. S&P rating is BB+; Moody's rating is Ba2 EDF Credit Measure is 1.67%, equivalent to BB rating • • Within the past month, market cap falls by almost half to $332 • million while liabilities remain at about $22.5 billion • Market leverage rises to 90% • EDF Credit Measure rises to 20.00%, the maximum August 11, 2002 Airways • US since thefiles for bankruptcy, the largest U.S. airline to do so attacks. November 8, 2002 UAL says it expects to lay off 2,700 flight attendants. Flight attendants union agrees to $412 million in wage cuts over 5-1/2 years two days later. Market value of assets is almost $17 billion, but that includes $23.4 billion of liabilities that set the default point to be...
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...Fingerhut is used to be a catalogue retailer and still actually exist as a catalogue retailer. The thing separates Fingerhut from retailer that it offers catalogue through mails. User can receive the catalogue from home through mails but there is also a Fingerhut.com, which offers a variety of products like clothing, electronics, appliances, etc. However, there are other choices or online shopping sites far better than Fingerhut, but financing is the reason why people should go for Fingerhut. When you go to finger.com you will find out sort of message that let you to comprehend that they are willing to work with all credit types. Therefore, whether you have good credit or bad credit, Fingerhut could be a possibility for you when you want to make those type of purchases. You will going to see messages like “apply today, buy today”, inside the payment page of Fingerhut. Fingerhut is willing to work with the people who do not have greatest credit history but want to perform payment in installment. Although there is no guarantee that are really looking for such people, but definitely encouraging people a lot through their services to use their credits for financing and purchase making. Fingerhut offers two types of financing, namely Fingerhut advantage and Fresh Start account. Fingerhut advantage. Fingerhut advantage is as similar as other credit card that you may know or use for making payment. Like other credit cards, this has also a high interest rate, so you can going to be payed...
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...Bibliography Formats MLA APA MLA APA MLA APA MLA APA MLA APA MLA APA MLA APA MLA APA MLA APA Book: Single Author Morales, Ed. Living in Spanglish: The Search for Latino Identity in America. Los Angeles: LA Weekly Books, 2002. Morales, E. (2002). Living in spanglish: The search for latino identity in America. Los Angeles: LA Weekly Books. Book: Two or More Authors Schofield, Janet Ward, and Ann Locke Davidson. Bringing the Internet to School: Lessons from an Urban District. San Francisco: Jossey-Bass, 2002. Schofield, J. W., & Davidson, A. L. (2002). Bringing the internet to school: Lessons from an urban district. San Francisco: Jossey-Bass. Book: Second or Later Edition Segen, Joseph C., and Josie Wade. The Patient’s Guide to Medical Tests: Everything You Need to Know About the Tests Your Doctor Orders. 2nd ed. New York: Checkmark Books, 2002. Segen, J. C., & Wade, J. (2002). The patient’s guide to medical tests: Everything you need to know about the tests your doctor orders (2nd ed.). New York: Checkmark Books. Book: Corporate Author Editors of Kiplinger’s Personal Finance. Know Your Legal Rights. Washington, DC: Kiplinger Washington Editors, 2001. Editors of Kiplinger’s Personal Finance. (2001). Know your legal rights. Washington, DC: Kiplinger Washington Editors. Book: Anthology or Compilation Sloane, Thomas O., ed. Encyclopedia of Rhetoric. New York: Oxford University Press, 2001. Sloane, T. O. (Ed.). (2001). Encyclopedia...
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...Short Summary Atlanta Home Loan April 2002 - Al formed Atlanta Home Loan (AHL), a mortgage lending and financing company, in Atlanta, Georgia - Initial investment of $40,000 - Operated the company from his home Summer 2002 - Company grew rapidly - 4 telemarketers and 8 loan officers who all worked from their homes - Established banking relationships which allowed clients to borrow at wholesale rates - Rates varied according to client FICO scores The Company - Leads were bought from list brokers - Telemarketers called people on the lead lists to assess their interest in refinancing - The lists were then passed on Al who distributed them to the loan officers - Loan officers helped with the applications and ordered an appraisal and credit report - Admitted for EMBA in California, Al had several options for AHL - As the company was appraised for $600,000 and was continuing to grow, he decided to find someone to operate the business in his absence Back to School - June 2002 A Partner- July 2002 - Impressed by Joe's sales ability and being people oriented, the two reached a verbal partnership agreement - Joe would invest $8,400 and be entitled to half of the profits - Al soon found out Joe was irresponsible and terminated the agreement while appointing a new manager that lasted 3 days prior to rehiring Joe A New Partner and licensing agreement - Sept 2002 - As Joe neglected his responsibilities once again, Wilbur, an acquaintance of Joe, was then hired and given the use...
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...Economic Consequences of the Sarbanes-Oxley Act of 2002 Ivy Xiying Zhang* William E. Simon Graduate School of Business Administration Carol Simon Hall 4-312 University of Rochester Rochester, NY 14627 zhangxi@simon.rochester.edu February 2005 I am grateful for the guidance of my dissertation committee, Bill Schwert, Charles Wasley, Ross Watts, and especially Jerry Zimmerman (Chairman). I also appreciate comments from Jim Brickley, Philip Joos, Andy Leone, Jerry Warner, Joanna Wu, Yan Cao, Ling Lei, Laura Liu, Tao Kuang, and workshop participants at the University of Rochester. All errors are my own. * Abstract This paper investigates the economic consequences of the Sarbanes-Oxley Act through a study of market reactions to legislative events related to the Act. I find that the cumulative abnormal return around all legislative events leading to the passage of the Act is significantly negative. The loss in total market value around the most significant rulemaking events amounts to $1.4 trillion. I then examine the private benefits and costs of major provisions of the Act by investigating the cross-sectional variation in market reactions to the rulemaking events. Regression results are consistent with the hypothesis that shareholders consider both the restriction of nonaudit services and the provisions to enhance corporate governance costly to business. The results also show that Section 404 of SOX, which mandates an internal control test, imposes significant costs on...
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...the answer to the impossible Jason C. O’Brien Quincy University OUTLINE TITLE Introduction Introduce Theo Attention-Getter A. Why he was as successful as a General Manager and why he will complete the most difficult task sports may have ever seen. Description Age & Background A. http://www.foundationtobenamedlater.org/founders.html B. http://www.imdb.com/name/nm1795393/ Education C. http://www.boston.com/news/globe/living/articles/2003/11/06/monet_goes_to_vegas_kerry_goes_out_on_the_town/ D. http://www.foundationtobenamedlater.org/founders.html Professional Background 1. Work with Orioles, Padres, Red Sox A. http://web.ebscohost.com/ehost/detail?vid=3&sid=68bfa412-56d2-4b1e-b615-7dc3839f07e0%40sessionmgr115&hid=124&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=11420045 B. http://www.foundationtobenamedlater.org/founders.html C. http://web.ebscohost.com/ehost/detail?vid=3&sid=4cc5a7a5-d23e-4ec5-be12-5d328206db5d%40sessionmgr111&hid=123&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=8703167 Current situation E. http://mlb.mlb.com/news/article.jsp?ymd=20110912&content_id=24581220 F. http://espn.go.com/chicago/mlb/story/_/id/7147573/chicago-cubs-introduce-theo-epstein-president-baseball-operations * * BODY Explanation of Success A. Focus 1. Type of GM a. http://usatoday30.usatoday.com/sports/baseball/2007-11-28-sw-gms_N.htm ...
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...The 1920’s: Baseball Uniform The decade of the 1920’s is often characterized as a period of American prosperity and optimism. This was the Jazz Age, the decade of the flappers. The 1920’s opened with an explosion of color and the wailing sounds and fast rhythms of jazz and energetic dancing. It was a time of tremendous change in America. America was one of the victors in the First World War and it enjoyed a period of great prosperity in the twenties. The Americans were opposed to anything that might drag them into another European war. Many Americans simply wanted to enjoy the prosperity that had developed in the previous decade and felt that foreign entanglements would threaten it. For the next decade America kept to herself for the most part. Most Americans enjoyed a high standard of living. Food was plentiful and cheap thanks to the vast quantity produced on American farms. More and more people bought their own houses through mortgages. Thanks to Henry Ford and mass production, one could buy a ford for $290. It was the “Roaring Twenties,” the decade of bath tub gin, the model T, the $5 work day, the first transatlantic flight, and the movie. It was the great age of popular entertainment. Among the world of entertainment, there were sports. Baseball’s growing popularity in the 1920’s can be measured by structural and cultural changes that helped transform the game. Ballparks were being constructed left and right. In 1920 the Cubs Field was opened and in 1926 re-named to...
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...Leadership Lessons from Billy Beane I just returned from seeing Moneyball, a great baseball flick. Brad Pitt plays Billy Beane, the GM of the Oakland Athletics 2002 squad that won an unprecedented twenty straight games that season—despite having the lowest pay roll in the major leagues. Season after season Beane would watch teams with deeper pockets steal his star players. When he realized that he couldn’t compete with the New York Yankee’s salaries, he decided that he needed to change the way the game was won. He needed to actually evolve the game by reimagining it in such a way that you couldn’t just buy the World Series. There are some leadership lessons in this true story for church leaders. First lesson: Do not prematurely resolve the tension. Billy refuses to accept solutions from his scouts and assistants that were based on the old paradigm. At this point, he had no solutions himself. He simply held the tension. He steeped himself in the conflict that ensued when he consistently contradicted the “experts”. He increased the evolutionary tension. It’s my experience that most leaders in the church capitulate in the face of conflict. How do we support our leaders and congregations to hold the tension, when everything in us wants to resolve it prematurely for the sake of a false peace—a peace that will ultimately keep us from evolving? Lesson 2: Staying in the fire focuses your attention on outside-the-box solutions. Billy stumbles upon a completely new model in a young Yale...
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