Commission (SEC) required from them as a public company that traded its securities in the New York Stock Exchange (NYSE). US Government’s reaction was to increase the regulation on the activities performed by all public companies by issuing the Sarbanes-Oxley Act (SOA) and creating the Public Company Accounting Oversight Board (PCAOB). It was now required that the Chief Financial Officer (CFO) of each company signed a statement on the effectiveness of the Company’s internal control and that the external
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Introduction In the case of Accounting for Enron, the scandal of Enron was revealed in October 2001 and eventually led to the largest bankruptcy in American History at the time. Enron, an American energy company based in Houston, Texas, and the dissolution of Arthur Anderson, which was one of the five largest audit and accountancy partnerships in the world. Enron collapsed in large part because of unethical practices of its top officials; they abused their power and manipulated information, and
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Full Disclosure Full Disclosure is a principle which calls for the reporting of significant financial facts that influence the decisions made by those reading the information (Kieso, 2007). The principle was adopted in 1933 as a byproduct of the 1929 economic crises, and created the full disclosure system. This system provides users of financial statements with material information, greatly improves the timeliness and quality of the disclosed information, reduces costs of raising capital, supports
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The Ethicality of Excello Telecommunications Cody S. Smith ETH/376 April 22, 2013 Ding Hardin The Ethicality of Excello Telecommunications Excello Telecommunications has been a profitable company for many years, but recently the competitive landscape has become tougher. Competition from overseas manufacturers has lowered Excello’s market share and profits. For the first time it looks as is Excello will not meet earnings estimates. This information directly impacts bonuses, stock options
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1. Section 301.4 of the Sarbanes-Oxley Act requires audit committees to (1) establish procedures for receiving and handling complaints related to “accounting, internal accounting controls, or auditing matters," and (2) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. 2. An effective whistleblower hotline should effectively receive and quickly respond to employee complaints. The hotline should handle complaints
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2. A company's board of directors is responsible for acting in favor of the shareholders benefit, such as making major company decisions that could affect the shareholders. The Board of Directors hires and fires the executives, decides on dividend policies, option policies and, how much to pay the executives. In my opinion, I think that the board of directors could have changed some policies, been more aware of the risk involving the SPE's instead of letting things unfold the way that they did. The
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Fannie Mae Management Planning Planning is a management function necessary for the success of any organization. Organizational planning has to include internal and external environments, evaluation of the marketplace, identifying, and analyzing factors that influence planning. Fannie Mae is an organization with a competitive edge in the housing marketplace. Fannie Mae accomplished this through effective planning. Overview of Fannie Mae Fannie Mae is a government-sponsored enterprise (GSE)
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The Fall of Enron 1. Why was Enron such an admired company prior to 2000? What innovation do they bring to the table? Be specific and support your statement with concrete information. Prior to the year 2000, Enron Company, established in the mid-80s, caused the admiration worldwide because of its fast rise of revenue both in the local and international stock market in a short period of time. Enron’s operating income in the year 2000 was stated in $100.7 billion and its after-tax net income was
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Ethics in Management Accounting What are ethics? According to the Merriam-Webster dictionary, ethics are defined as, “Rules or behavior based on ideas about what is morally good and bad.” Ethics are rooted in an individual or an entire group’s moral values that govern daily behavior and crucial decisions. From a professional perspective, ethics provide a given quality and ensures a fair practice. In terms of business, it is the moral duties and obligations that apply to various professions and their
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The role of ethics and compliance in Starbucks is set in place to ensure that all of Starbuck’s staff from the baristas working the front counter to the corporate staff are all abiding by federal laws and regulations. Ethics in financial practices are sometimes hard to believe. The agency problem is the result of conflict of interest between stockholders and the managers of a firm (Titman & Keown, p. 15, 2011). “A conflict of interest is a situation in which a person has a private or personal
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