Local Lawsuit Deborah Riley Professor Maria Toy LEG100 – Winter 2012 January 29, 2012 Question #1 - Summarize the actions that lead to the lawsuit. In the suit Board of Trustees of Community College District No. 508 v. Coopers & Lybrand, the Board filed suit due to Cooper’s failure to report discrepancies and inappropriate investments by the Treasurer and Chief Financial Officer Phillip R. Luhmann. According to Kilbride (2003, p.1), “in 1988, 1990, and 1992, the Board Adopted
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accountant is reliable and adds to their degree of trustworthiness for the client. The reason it has become so important to monitor the ethical behaviour of accountants is because of the recent scandals by corporate and accounting firms like Enron and WorldCom as mentioned by (Chan, 2006). It was further mentioned that ethical problems are a part of any business due to the interaction of the accountants with so many people with different interests that it leads to conflict of interests. Many different
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of Accounting Ethics - Week 3 Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior: In the past several years, Enron, WorldCom, Tyco, and others have committed financial scandals, which caused the stock market to take a hard hit. Investors and lenders learned from these scandals in the past, and just recently, have become hesitant to invest in any company that they think
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the adequacy of those controls. For publicly traded companies, Section 404 had costly implications, as it is expensive to establish and maintain the required internal controls. According to Investopedia.com, the scandals with Enron, Tyco, and WorldCom shook investor confidence in financial statements and required an overhaul of regulatory standards. The Securities Exchange Commission (SEC) is responsible for setting deadlines for compliance, in addition to publishing rules for compliance.
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Congress passed the Sarbanes-Oxley Act (SOX) in July of 2002, to restore public confidence in corporate America following the scandals at host of US companies including Enron, Arthur Anderson, Tyco, WorldCom and Global Crossing. The SOX has heralded a new era of transparency and accountability for corporate financial reporting (Bisoux, 2005). PCAOB stands for Public Company Accounting Overseeing Board. Restating from PCAOB's website, it is a nonprofit corporation established by Congress to oversee
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and cash flow were swayed and clearly inflated. This misled investors. The above are just to name a few contributions to Enron’s downfall. 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management, and Sunbeam audits: the public interest or something else? Cite examples that reveal this motivation The prime motivation behind the decisions of Arthur Andersen’s audit was profit and greed and was not in the best interest
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Article Review: Sarbanes-Oxley Act of 2002 It is unfortunate that many increasing standards come after a failure in the system. The Sarbanes-Oxley Act of 2002 is a primary example. The public scandals of Enron, Tyco and WorldCom were quickly followed with this act. It brought great change throughout the world of business. The Act was enacted in July of 2002 and co-authored by U.S. Sen. Paul Sarbanes of Maryland and U.S. Rep. Michael Oxley of Ohio. The Sarbanes-Oxley Act gave more confidence
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announcement of the need to restate its financial statements. The follow-up question: “How could this happen to a company that had received an unqualified auditor’s opinion on its historical financial statements for so many years?” The Enron and WorldCom scandals have alerted the financial community and regulators to financial reporting abuses. Corporate governance is suddenly front-page news, forcing many corporations to restate earnings and leading to the passage of the U.S. Sarbanes-Oxley Act
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personal gain. Many of the issues we face with the current economy are blamed on the unethical behavior in the accounting industry. Two of the most famous companies that were eventually caught and prosecuted for unethical accounting behaviors were WorldCom and Enron. The falsification of financial statements and fraudulent activity in the stock market causes thousands of public investors to lose money. During these scandals, some of the people inside the companies were earning millions of dollars
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Sarbanes-Oxley Act (SOX) ACC290 March 29, 2012 Sarbanes-Oxley Act (SOX) The Sarbanes-Oxley Act (SOX) was created on July 2002 after numerous financial scandals involving companies such as Enron and WorldCom. The main section of the act which is section 404(a) requires management to provide the financial reporting accurately and effectively. This is called Internal Control over Financial Reporting (“ICFR”). There are several sections that have been created to assure the accuracy of the financial
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