Lge 500 Week 10 Discussion 1&2 Essay

1. Identify the key problem in the case and explaining why it is the key problem.

1. Discuss and explain four exceptions to the warrant requirement. What are the prerequisites for each exception? Be sure to provide examples.

Since its inception, the PCAOB has been criticized by many parties. Summarize the principal complaints that have been directed at the PCAOB. Do you believe this criticism is justified? Explain. What measures could the PCAOB take to improve its effectiveness as a regulatory body?

The main objective of the Sarbanes-Oxley act was to reduce fraud. So far that objective seem to have been obtain. Since SOX was enacted, there has not been a major domestic corporate financial scandal uncovered other than the options back-dating scandal that occurred before July 2002 (Jahmani & Dowling, 2008). It is a tax advantage because companies and investors are not losing money.

P1. Identify the threats and the consequences of a failure in securities that exist to the security of people, property and premises in a public service.

7. Locate a case that involves mitigating factors. Cite the case and explain why the case had mitigating factors.

This is because when the SOX Act was enacted it provided detailed guidelines with strict sentences if these guidelines were not followed. David E. Hardesty, accountant and author of Corporate Governance and Accounting Under the Sarbanes-Oxley Act of 2002, said it very well, stating “Each place where information could be altered, either inadvertently or on purpose, Sarbanes-Oxley attempts to fix it. These problems were created by people who were willing to take the risk that they could cook the books and get away with it. In today’s environment, the feeling is that if we cook the books, we might get caught.” The following chart shows how since the SOX Act has been implemented there has been a reduction in lawsuits.

2. Evaluate Andersen’s claim that their problems on the Enron audit were due to a few “bad partners” in the organization. If you disagree with this claim, discuss what you think were the root causes of the problem. I do not believe Andersen’s claim. I believe that they had full knowledge of what was happening at Enron. I believe that Enron was paying off the auditors (staffers) in the Houston office. I believe they were

Sarbanes-Oxley (SOX) was created to address the reoccurrence the likes of the several major scandals of the past. The nature of those past years scandals made it clear that preventative measures was a possible way to prevent any future scandals. And the efficacy of Sarbanes Oxley Act, many people as well as companies believed that fraud is easy to prevent.

Different portions of legislation have had an impact on corporations, accounting firms, and investors like Sarbanes-Oxley. Sarbanes-Oxley was passed by Congress in 2002 as a direct result of the accounting scandals that plagued the public equity markets during the late 1990s and early 2000s. Sarbanes-Oxley was developed to be a series of measures, safeguards, guidelines, and criminal punishments in order to prevent future accounting scandals on the scale of Enron and Worldcom. Sarbanes-Oxley has profoundly impacted both management and accountants although in mostly similar ways. The following exploration will compare and contrast these views held by management and accountants regarding Sarbanes-Oxley.

Title II of Sarbanes-Oxley covers Auditor independence, it contains nine sections all covering different aspects of auditors’ independence. Section 201, Services outside the Scope of Practice of Auditors, details what activities are not allowed to be performed by auditors for a client if they are to be performing an audit for that client. Detailed in section 201 as prohibited in order to maintain auditor independence are legal and expert services unrelated to the audit, any investment advisement, investment banking services, management or human resource functions, internal audit outsourcing services, actuarial services, appraisal or valuation services, financial

The development of the Sarbanes-Oxley Act (SOX) was a result of public company scandals. The Enron and Worldcom scandals, for example, helped investor confidence in entities traded on the public markets weaken during 2001 and 2002. Congress was quick to respond to the political crisis and "enacted the Sarbanes-Oxley Act of 2002, which was signed into law by President Bush on July 30" (Edward Jones, 1), to restore investor confidence. In reference to SOX, penalties would be issued to non-ethical or non-law-abiding public companies and their executives, directors, auditors, attorneys, and securities analysts (1). SOX significantly transformed the procedures in which public companies handle internal

The Sarbanes-Oxley Act also helped managers see that their companies had many weaknesses, such as “lack of enforcement of existing policies, unnecessary complexity, clogged communications, and a feeble compliance culture” (2006), per the Harvard Business Review. Managers and executives could recognize their company’s weaknesses because SOX requires publicly traded companies to be standardized. Section 302 explains the corporate responsibility behind the financial reports, such as how the CEO and CFO must be involved in the auditing process and how they must report any fraud that they see in the reports. This section forced managers to overlook their internal audits and therefore helped them to see what needed to be done to improve the financial

21. The Sarbanes Oxley Act of 2002 is intended to: A. B. C. D. E. protect financial managers from investors. not have any affect on foreign companies. reduce corporate revenues. protect investors from corporate abuses. decrease audit costs for U.S. firms.

Sarbanes Oxley (also known as SOX) is legislation passed by the United States Congress in 2002, in the wake of a number of major corporate accounting scandals. Enron, WorldCom, Tyco, and others cost investors billions when their stock prices collapsed. As a result of SOX, top management must separately certify the accuracy of financial Furthermore, consequences for fraudulent financial activity are much more severe. Also, SOX intensified the management role of boards of directors and the independence of the external auditors who review the accuracy of corporate financial statements. The primary changes caused the formation of the Public Company Accounting Oversight Board, the assessment of personal liability to auditors, executives and board members and creation of the Section 404, which recognized internal control events that had not existed before the legislation.