Ac 504 : Ethical Issues

Fraudulent financial reporting is one form of corporate corruption and may involve the manipulation of the documents used to record accounting transactions, the misrepresentation of accounting events or transactions, or the intentional misapplication of Generally Accepted Accounting Principles (GAAP) (Crumbley, Heitger, and Smith, 2013). Examples of fraudulent schemes befitting of this category abound and usually involve financial statement items that have been misclassified, omitted, overstated, undervalued, or prematurely recognized. One case involving CEO Bill Smith of Moonstay

Sarbanes–Oxley, Sarbox or SOX, is a United States federal law which was introduced in 2002. It is also known as the “Public Company Accounting Reform and Investor Protection Act” and “and 'Corporate and Auditing Accountability and Responsibility Act”. The main objective of the act is to protect investors by improving the accuracy and reliability of corporate disclosures. New aspects are created by SOX act for corporate accountability as well as new penalties for wrong doings. It was basically introduced after major corporate and accounting scandals including the scandals of Enron, WorldCom etc so that the same kind of scandals do not repeat again.

Most people agree that the SOX Act provides the most comprehensive amendments to the 33 and 34 Acts in United State history. Due to the stricter financial law from the Sarbanes-Oxley Act, other international countries have adopted similar laws such as Australia, France, Germany, India, Italy, Japan, South Africa, and Turkey to help with it came to financial reporting. The SOX Act have 11 mandate and requirement for corporations to report their financial statements. The following are the 11madate titles and requirement under the Sarbanes-Oxley

Title I of the SOX Act of 2002 is divided into nine sections that go from the establishment of the Public Company Accounting

The Sarbanes - Oxley Act of 2002 is the most important piece of legislation since the 1933 and 34 securities exchange act, affecting everything from corporate governance to the accounting industry and much more. This law was in direct response to the failure of corporate governance at Enron, Tyco, and WorldCom. The Sarbanes - Oxley seeks to bring back the confidence in all publicly held corporations to the shareholders, while placing more responsibility on CEOs and CFOs for the actions of the corporation. "Sarbanes - Oxley is more than just another piece of legislation - it has become synonymous with a new culture of corporate accountability and reform1." The SOX, as it has come to be known, covers a myriad amount of corporate

According to the textbook, Sarbanes-Oxley Act is a federal statute enacted by Congress to improve corporate governance (Cheeseman, H. R., p.344). It was passed by congress that sets policy and regulates the accounting practices of U.S corporations.

The Sarbanes-Oxley Act was a law created in 2002 to ensure that the boards of public companies oversee their companies in a more competent and transparent way in order to protect investors. Section 302 refers to the obligations of the corporate officers who sign the financial reports. The officers are responsible for verifying that the report is accurate and represents a true picture of the company’s financial condition. Section 401 states that The Commision must evaluate the financial reports. Section 404 covers the company’s internal control structure and the requirements of the accounting firm in assessing internal controls and reporting procedures. Section 409 requires a company to disclose information on changes to financial conditions or

There used to be a time in the United States when there were no regulations in place to protect the public from corporate greed and deceit. Publically traded companies used the auditors they had on retainer to audit their financial statements. There was no reason to believe that such large corporations would allow their share holders to fall. That fairytale came to an end with the discovery of the Enron and WorldCom scandals. These nightmares made the public “wake up” and realize that nothing was required of these companies to prove their statements or protect their shareholders. Regulation was

The Sarbanes-Oxley (SOX) act was passed into law in 2002. It was created in response to major financial scandals that largely shook the public's confidence in corporate accounting practices. It was a significant response to improper record handling techniques. Under the law, corporate managers must assess whether they have sufficient safeguards to catch fraud and bookkeeping errors. There are consequences for not complying with the provisions of the act and there are certainly advocates and opponents of it. Price Waterhouse Coopers says "Without a doubt, the Sarbanes-Oxley Act is the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public

After major corporate and accounting scandals like those that affected Tyco, Worldcom and Enron the Federal government passed a law known as the Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act. This law was passed in hopes of thwarting illegal and misleading acts by financial reporters and putting a stop to the decline of public trust in accounting and reporting practices. Two important topics covered in Sarbanes-Oxley are auditor independence and the reporting and assessment of internal controls under section 404.

In July 2002 the United States Congress passed a law, known as the Sarbanes-Oxley Act (SOX), as a set of standards for companies when reporting financial statements. The goal of the SOX is to protect investors from investing in companies that alter their financial statements to make it appear as though it was in good financial position when in reality it is not. The SOX states that auditors must ensure that the financial statements of a company are in no way misleading to potential investors.

Furthermore, according to soxlaw.com an online guide to the Sarbanes-Oxley Act the major compliances to the act rest on 5 sections:

      The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general

After that, he explains how Congress adopted the Sarbanes-Oxley Act of 2002, the New York Stock Exchange (NYSE) and Nasdaq adopted comprehensive new corporate governance rules regarding disclosure, and the Securities and Exchange Commission (SEC) adopted a requirement obligating chief executive officers (CEOs) and chief financial officers (CFOs) to certify that their financial statements and reports were accurate and not misleading, with possible criminal charges if their numbers turned out to be bogus (Brountas, 2004, Ch. 1, Legislative & Regulatory Corrective Action). He acknowledges that there are critics to the new laws, rules and penalties, but stands firm on his position that the laws have helped to restrain and will eventually eliminate the recent corporate corruption that financially crushed trusting investors (Ch. 1, The Sarbanes-Oxley Road Map).

The Sarbanes-Oxley Act of 2002 (SOX) was enacted into law in 2002 in the wake of corporation financial reporting scandals involving large publicly held companies. SOX instituted new strict financial regulations with the intent of improving accounting practices and protecting investors from corporate misconduct. SOX requires corporate executives to vouch for the accuracy of financial statements, and to institute and monitor effective internal controls over financial reporting. The cost of implementing an effective internal control structure are onerous, and SOX inflicts opportunity costs upon an enterprise as executives have