USA and some other countries, such as Australia, dramatically demonstrated how the efficiency of financial markets is based on assumptions of trust and ethical behavior of corporate managers (McPhail 2001). The collapse of companies such as Enron, WorldCom and Global Crossing in the USA, HIH Insurance and OneTel in Australia, and Parmalat in Italy, has led to a loss of confidence by the investing public in the system of financial reporting and accountability. The globalization and diversification of
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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 (Guide
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Ethics Essay Nancy Castro Ethics 316 Ruth Embleton March 7, 2012 Ethics Essay Comparing and contrasting ethical theories helps one to understand ones guidance system, which helps or aides one through their decision-making process. “Each theory emphasizes different points such as predicting the outcome and following one's duties to others in order to reach an ethically correct decision.” (2011) each theory has a familiar thread with a goal. In this paper each of the following three ethical
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regarding the fishy accounting structure of Enron and its partner in crime, Arthur Anderson (accounting firm). Consequently, Enron resulted in bankruptcy. This bankruptcy would be the world’s largest bankruptcy filing after the same audit failure of WorldCom earlier. Before Enron filed bankruptcy, its blue chip stock prices dropped from approximately 90 dollars to 30 cents. Considering there was only a faint clue of Enron’s fraud, this uncalled-for event was the most devastating financial fraud and
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Walter Alston Midterm Portfolio Assignment Mr. Simon February 28, 2011 Logic & Reasoning Ethical business practices include assuring that the highest legal and moral standards are observed in your relationships with the people in your business community. This includes the most important person in your business and your customer. Ethical decision making in today's business and personal world, ethical decisions are made on a daily basis. Most of these decisions are based on company ground
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Nicholls was printed in the CPA journal in April of this year. To give a brief history of SOX after the corporate fraud in the early 2000’s the SEC felt pressure to respond. Their response to the fraud committed my giant corporations such as Enron and WorldCom was the Sarbanes-Oxley Act. The main point of SOX was to try to limit or ideally eliminate corporate fraud by cracking down on self-regulating audit. The answer as to whether SOX is working or not is not as simple as yes or no. Some say that the
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Abstract There are more differences in how the NYSE and NASDAQ operate than similarities. NYSE operates at a physical address while the NASDAQ takes place on a very complex telecommunications system of buyers and sellers. With all the buy and selling the buying and selling taking place, investors can be misled into an investment that will profit only the seller and leave the buyer broke. The Sarbanes-Oxley Act has been put in place to protect both buyers and sellers from unethical practices.
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could start operating under their own guidelines which may or may not involve integrity, responsibility, or accountability. Publically traded companies are required to have some type of corporate governance in place since the scandals from Enron and WorldCom. The case study that we are discussing is from United Thermostatic Controls. United has many different divisions and they are all decentralized according to their respected area. The southern division has been gradually decreasing in sales and
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of United States passed in 2002. It brought the most important reform in the current public financial reporting of United States. The act was developed to reinstate the confidence of public in the public companies management after the scandals of WorldCom, Enron, and others. Sarbanes-Oxley has influenced the liabilities and responsibilities of Board of Directors, Corporate Executives, Auditors, Audit Committees, and Analysts (Advantages and Disadvantages, 2012). The strength of the act is companies
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Charles T. Horngren, and C. William Thomas in their book Financial Accounting, VitalSource for DeVry University (p. 236). Congress passed the Sarbanes-Oxley Act (SOX) to address and ease the concerns of the public ever since the scandal of Enron and WorldCom. In order to comply with the SOX act the following requirements must be followed: * Public companies must have an internal control report with an evaluation of an outside auditor. * Someone from a Public Company Accounting Oversight Board
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