statements, and increased the oversight role of boards of directors.[1] The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation's securities markets. The act contains 11 titles, or sections, ranging from additional corporate
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internal controls each organization must be able to confirm their compliance by an independent outside audit. SOX came about because of public outrage to lack of corporate integrity and accounting dishonesty. Major corporations such as Enron and WorldCom were dishonestly reporting accounting figures to investors and such dishonesty led to the major losses in investor’s money. SOX requirements have improved Assignment BE5-1 Sales: $181,500 Cost of goods sold: $41,200 Gross profit: $38,000
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social environment in the Mississippi state, which I really knew nothing about. It is very important in this particular case because lack of workplaces and the overall “not wealthy condition” of the area was highly interrelated with what happened with WorldCom. I suppose that if those two middle-level accountants who directly changed the books didn’t think that it would be almost impossible to find an equivalent job in Jackson and they have people that depend on them financially, they could refuse to deceive
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decades. Effective in 2006, all publicly-traded companies are required to submit an annual report of the effectiveness of their internal accounting controls to the SEC. It came as a result of the large corporate financial scandals involving Enron, WorldCom, Global Crossing and Arthur Andersen. Provisions of the Sarbanes Oxley Act (SOX) detail criminal and civil penalties for noncompliance, certification of internal auditing, and increased financial disclosure. It affects public U.S. companies and
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Unethical accounting behavior has been on the forefront since the 1980s, in the United States. Unethical behavior is when someone takes advantage or manipulates another without their knowledge. Unethical behavior normally starts within upper management and transcends to the other employees. Unethical behavior consists of bribery, misusing funds, or manipulation of financial reports. When management or accountants knowing and unknowingly has overstated the value of the company’s assets and revenues
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After last several big accounting frauds that Unites States has gone through, auditors now carry a burden heavier than ever on their shoulders. Chap 5 introduced the different types of audit reports that can be issued when auditing a company’s financial statements, and also raised issues like loyalty to bosses and co-workers, expectation gap and internal control. When a fraud initiates, it is usually not because the involved person intends to commit a crime or he/she is immoral, instead, in most
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SARBANES-OXLEY ACT OF 2002 1 Introduction The Sarbanes-Oxley Act was passed in 2002 because of corporate scandals involving fraud and regulatory mismanagement in companies such as WorldCom and Enron. These companies went bankrupt after giving misleading or false financial reporting that indicated they were more financially healthy than they actually were. For example, Enron deliberately misrepresented significant percentage of
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problem tied directly to an individual’s moral compass. We have all heard the stories of accountants of large international corporations that falsified financial statements in order to pocket large sums of money for themselves. Remember Enron, WorldCom, and Tyco? The leaders of these companies committed crimes for their own financial gain but in the end, they paid heavy prices for their misdeeds. God warned us about the consequences of such actions in Proverbs 28:20
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Regulatory and Compliance Issues Paper •If auditing of financial statements is required primarily for the protection of public investors, should not all PCAOB members be taken from the investment community that uses audited financial statements? •What regulatory compliance requirements apply to various business situations? The Public Company Accounting Oversight Board (PCAOB) is a private-sector, nonprofit corporation created by the Sarbanes–Oxley Act of 2002 to oversee the audits of
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Week(January 27,1992): 48–49. 8 S.A. Waddock, "Building Successful Social Partnerships," Sloan Management Review(Summer 1988): 18. 9 J. Vleggaar, "The Dutch Go Back to School for R&D," The Journal of Business Strategy(March/April 1991): 8. 10 "WorldCom, Sprint Continue Antitrust Discussions," The Wall Street Journal (June 23, 2000): B6. 11 M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Companies (New York: The Free Press, 1980); D.F. Jennings and J.R. Lumpkin, "Insights
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