INTERNAL AUDITING MOVIE REVIEW: Enron Movie: The Smartest Guy in the Room Tutor: Ms. Bewry March 29, 2014 Ashley Johnson-Blake ID #100426 Review Questions 1. Identify at least five (5) control issues in the movie using the Committee of Sponsoring Organization of the Treadway Commission (COSO) framework as a guide. According to COSO, the five control issues are concerned with the control environment, risk assessment, control activities, information and communication and monitoring. Based
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of both sides of the argument. The Sarbanes-Oxley Act is a bill passed by Congress in 2002 after several corporations took actions that caused their companies to fail. These companies include Enron and WorldCom. As a result of these actions, stockholders lost confidence in the financial system. The intent of the bill is to protect investors of corporations by making the corporations accountable for any unacceptable accounting errors and practices
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Sarbanes Oxley Act. Sarbanes-Oxley Act of 2002 was basically established to deal with unethical behavior and corporate social responsibility issues. This law was established to enforce accounting auditing and to protect investors. Companies like Enron and WorldCom scandals made it imperative for Congress to pass such a law to protect Investors, Corporation Employees, etc. This Act was not favored by a lot of organizations. Companies had to create procedures to meet what SOX require and it’s compliance
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Ethics and Compliance Paper FIN/370 July 14, 2011 Ethics and Compliance Paper Introduction Starbucks boasts that they serve the best coffee possible to meet their mission to inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time. Starbucks has grown from one store in Seattle founded by two teachers and a writer in 1971 to more than 17,000 stores throughout the United States and overseas companies. Of these, 53% are directly owned by Starbucks and the rest
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result of the Enron and World Com financial collapses (Ryu 2009). The law was enacted to enhance the standards for all US based public companies financial reporting, this happened as a result of the Enron and World Com financial collapses (Elson 2008). This law was designed to help create auditor independence, so financial reports that are relied upon from prospective shareholders and lenders are accurate.(Li-ying 2011). The law, as I have said was enacted as a knee jerk reaction to the Enron collapse
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analysis of capital and factors of production that would correctly reflect how value is added. Newspaper and television journalists have hypothesized that the stock market downturn of 2002 was precipitated by reports of accounting irregularities at Enron, Worldcom, and other firms in the United States. One commonly accepted incentive for the systemic over-reporting of corporate income which came to light in 2002 was the granting of stock options as part of executive compensation packages. Since stock
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The Enron Collapse Enron, a high profile organization which ranked as the seventh largest company in the United States during the 1990’s consisted of approximately 25,000 employees worldwide and held revenues in the tune of over 100 billion dollars in 2000. Enron controlled about one quarter of the gas companies in the United States and also expanded into Myriad energy products during its years of operation. The company traded hundreds of products throughout the wider Continentals including South
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ICS PRESENTATION CASE 2 Issue 3 : Auditor’s issue. The independence of auditor’s in Flat Cargo Berhad(FCB) is much questionable. This is mainly due to the fact that the appointed company auditor has been previously hit by another case of fraud in the other entity concern. This could be a very worring circumstances that the company has to face as there is high posibility of the auditor to commit fraud the second time in FCB. The lack of independence in the auditor could lead to inappropriate
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practices in business. The Sarbanes-Oxley Act of 2002 (SOX) was passed by the 107th Congress on July 30, 2002 (Sarbanes-Oxley, 2002) to provide protection to investors and shareholders as a result of fraudulent activities by some U.S. Corporations such as Enron, Tyco, WorldCom, and Adelphia, as well as other public companies (Jennings, 2012; Scott & Nganje, 2011). SOX introduced major regulatory changes which affect financial practice and corporate governance; and compliance is mandatory for ALL organizations
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when will the fraudulent activity stop. The answer is never because as long we have businesses someone go to the dark side and do dishonest things. Since the SOX and creation of PCAOB and AICPA the activity has been a small amount and not as large as Enron and World Com. Also the number of auditors getting in trouble are in small amounts of activities. Even though they might think they were successful in manipulating the work papers, they will always get caught or do the right thing turn themselves in
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