1. What are the four major types of firm in the U.S, how are they defined, and what are the key differences between them? I understand from the course text that within the context of corporate finance the four types of firms in the U.S. are sole proprietorship, limited liability companies, partnerships and corporations (Berk & DeMarzo, 2011). These four firms are fundamentally different in their makeup and operations. To begin with a corporation is a legally defined artificial being with legal powers
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during the act of fraud. Table of Contents ABSTRACT ii INTRODUCTION 1 Sarbanes – Oxley Act of 2002 (SOX) 1 Statement of Auditing Standards Number 99 (SAS No. 99) 4 Parts of the Fraud Triangle 5 Types of Fraud 11 INSTANCES OF FRAUD 13 Enron Corporation 13 Adelphia Communications Corporation 17 AOL Time Warner, Inc. 20 Bristol-Myers Squibb Company 25 Global Crossing Limited 27 K-Mart 30 Tyco International, Ltd. 34 WorldCom 37 HealthSouth Corporation 41 CONCLUSION 45
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financial scandals that have occurred in both the United States and abroad in the past decade. For many organizations, the way to rebuild shareholder confidence was to implement a fundamental framework of procedures that would ensure scandals like Enron, WorldCom and Tyco would not occur in the future. It is precisely these scandals that made corporate governance the focus of organizations worldwide. Corporate governance is defined as the principles and processes that provide the strategies on how
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in the London Whale Scandal | ACC557 Professor Brandy Havens | Kristi Spann | 1/23/2014 | | In recent times, there have been several ethical scandals that, in some cases, destroyed companies. The most infamous scandal was Enron. Enron was an energy company that was formed in 1985. It was the seventh largest energy company in America. According to Forbes.com, the charges related to knowingly manipulating accounting rules and masking the enormous losses and liabilities of the
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Abstract This paper discusses the role and function of the Public Company Accounting Oversight Board (PCAOB) and Auditing Standard 5 (AS 5). Due to the increased demand for oversight in auditing standards, this paper also examines the impact of Sarbanes-Oxley (SOX) and the reasons for the creation of the PCAOB, as well as the implementation of the rules and regulations. Additionally, this paper examines the impact of AS 5. Keywords: audit, AS 5, financial statements, PCAOB, SEC, SOX Table
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............................... 14 2.2 Self-regulation prior to SOX ..................................................................... 18 3. Literature Review: The SOX Act ................................................................ 19 3.1 Enron, the trigger to SOX? ........................................................................ 22 4. The Sarbanes Oxley Act: Radical Reforms in Key Areas ....................................... 26 4.1 Establishing the Public Company Accounting Oversight
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ETHICS IN ACCOUNTING: THE WORLDCOM INC. SCANDAL Conf.univ.dr. Lucian Cernuşca “Aurel Vlaicu” University, Arad, str. Piaţa Sporturilor, nr. 10, bl. 25, apt. 7, 310167 Arad, Phone: 0730468534, luciancernusca@gmail.com What is ethics? What does ethics have to do with accounting? How does a scandal affect the business environment and the society? This article will explain just those questions by analyzing a “famous” fraud scandal: WorldCom Inc. The article discusses the chronology of events
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Financial Management Financial Management of Health Care Organizations Michele R. Belton HCS/405 1/16/2012 Joseph M. Shin Financial management requires four elements in financial accounting reporting. These elements are thought of as a set. These elements include a balance sheet, a statement of revenue and expense sheet, a statement of fund balance or net worth and the statement of cash flows. A balance sheet keeps record of what a company owns, what the company owes and what the company
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importance to incorporate this legislative act so ethical practices can begin to have changes in the business environments. It will further explain that due to the high degree of influence, professionals should follow a strict code of ethics, and I will review the code of ethics established by the Institute of Managerial Accounting. I will use observations, articles, and peer reviewed sources. There is a need for fiduciary educational change that is necessary with respect to how individual
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Final Paper: Case Study of WorldCom Financial Statement Fraud Introduction This paper will discuss the financial statement fraud committed by WorldCom by examining what led up to the fraud, who committed it and why, and the impact it caused on various stakeholders and the economy. WorldCom applied aggressive and undisclosed accounting tactics to provide financial statements that reflected a $10 billion profit for the years 2000 and 2001, rather than the actual combined loss of $73.7 billion
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