show the American public and its representatives in Congress that new compliance standards for public accounting and auditing had to be put into place. Enron was one of the biggest and, it was thought, one of the most financially sound companies in the U.S. Enron was perhaps the catalyst for the Sarbanes-Oxley legislation. Enron stands for the greatest company scandal in the history of the US economy and has become a symbol of corruption for the whole Western economic system. In 2001, the nation
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tree type dealings that included covering debts in order to keep them from being reflected on the company’s accounts. It has been understood that WorldCom’s accounting practices were so false that the company was led into the largest bankruptcy in history. Unethical accounting practices and scandals of the capacity of the Enron / Andersen and the
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auditors should be very selective in accepting engagement with new clients. They have to think of potential problems they could run into that could permanently affect their reputation. Before accepting a new client, the auditor should investigate the history of the client by obtaining information about the company and the management. If this information presents a level of engagement risk that the CPA firm is comfortable with, then they can move forward with acceptance. The procedures that auditors perform
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How should these factors have affected the planning and execution of the engagement? First of all, the nature of NextCard operations was very risky. The fact that they authorized credit to customers without properly analyzing their credit report history was the reason of the losses. NextCard was primarily concern of having a large amount of customers regardless of the risk. Because NextCard was on online business, they should execute more caution when accepting clients. The audit engagement had
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Careers Microcomputer Accounting II April 8, 2011 Find Out About Yourself I took the Career Interest Game. The three categories I selected were Conventional, Realistic, and Investigative which makes me CRI. My first choice was the Conventional otherwise known as “The Organizers.” I can relate to most of the list under the “Are You?” category. I am well organized, accurate, and efficient in most everything I set out to accomplish. I like things to be structured and organized. I always
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“The Expectation Gap” By: Kiara Holmes ACC 371 Intermediate Accounting I Instructor: Lin Zheng Writing Assignment 1 9/5/2012 The auditor’s role in fraud detection has had a long history of confusion and controversy. Despite increasing professional guidance, which has focused more attention on auditor responsibility to detect fraud, there’s still considerable uncertainty about where the auditor’s responsibility ends towards detecting fraud. This uncertainty leads to “The Expectation
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The Sarbanes-Oxley Act was passed by Congress in 2002 in an effort to prevent and punish corporate corruption and to repair investor confidence. The act imposes on all publicly traded corporate organizations the requirement of mandatory accounting oversight, detailed disclosure requirements and criminal liability for noncompliance or violations of the act. Sarbanes-Oxley is named for Sen. Paul Sarbanes and Rep. Michael Oxley, the act's primary authors. The law was overwhelmingly passed by both houses
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previously issued financial statements as a result of accounting irregularities and fraud. Especially responsible were the very visible Enron and WorldCom fraud cases. Both companies filed for bankruptcy and constituted the largest companies in American history to do so. The extent of the accounting irregularities and fraud being investigated and disclosed brought into question the effectiveness of financial statement audits. In addition, the criminal conviction of Arthur Andersen, LLP, one of the then
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employees, and how rewards determined. BUSINESS ENVIRONMENT TECHNOLOGY | MARKETS | REGULATIONS | Company started using computers for bookkeeping.Company developed the largest technology practice. | Arthur Andersen was well respected, reputable auditing company for many customers.Early 1950s Andersen entered in computer consulting business. | The federal law in 1930’s which required companies to provide their financial statements to an independent auditor each year helped Andersen’s grow. | STRATEGY
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Advanced Auditing Shams Kamal Assignment 1 Professor Whisenant MEMORANDUM September 14, 2011 TO: Johnny Whisenant FROM: Shams Kamal SUBJECT: Summary of John C. Coates article, “The goals and the promises of Sarbanes-Oxley Act”. On July 25, 2002 the date when stock market indices were making a new history against over publicized corporate scandals, bankruptcy and accounting misstatements, the new legislation
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