Sarbanes Oxley Outline - 676 Words

The Ineffectiveness of the Sarbanes Oxley Act In Corporate Management and Accounting In the early 1990s, a young company named Enron was quickly moving up Fortune magazine’s chart of â€Å"America’s Most Innovative Company.† As the corporate world began to herald Enron as the next global leader in business, a dark secret loomed on the horizon of this great energy company. Aggressive entrepreneurs eager to push the company’s stock price higher and a series of fraudulent accounting procedures involving special purpose entities were about to be exposed. In early 2002, the United States Justice Department announced its intent to pursue a criminal investigation into the once mighty company, Enron. After the gross negligence of accounting†¦show more content†¦Passing of Sarbanes by Congress to limit corporate accounting violations. (Sarbanes Oxley Act of 2002) 2. The creation of the Public Company Accounting Oversight Board and its controversial creation. a. The mandatory registration of public accounting firms who prepare audits for public companies. b. The extensive rules given to accounting firms under  §103 of Sarbanes Oxley and the complexity of their application. c. How public accounting firms are unable to handle increased auditing and accounting demands by public companies. 3. Increase in expenses for businesses to achieve compliance with Sarbanes standards. a. Inaccurate calculations made by Congress minimizing the costs associated with Sarbanes compliance. (Feeney, T., The Heritage Lectures; No. 995) b. Businesses struggle with the cost of accounting department upgrades for internal audit procedures due to lack of funds. c. The slow destruction of the U.S. economy where companies find more benefits of going public in overseas markets or selling to private equity firms. 4. The controversy surrounding Sarbanes  §404 and its application to corporate accounting. (In re Buca Inc. Secs. Litig, 2006) a. The ambiguity Sarbanes  §404 presents for corporate management and the relationship of external auditors. (In re Cardinal Health, Inc. Sec. Litigs., 2006) b. The inability for accounting firms to interpret and apply Sarbanes  §404 clearly for publicly held corporations.Show MoreRelatedLjb Company Case1592 Words   |  7 PagesExternal Consultation to LJB Company EXTERNAL CONSULTATION TO LJB COMPANY Abstract A paper presented on the case study 2 review of LJB Company. The paper will address growing issues of Sarbanes-Oxley compliance, and business ethics in regards to Corporate Social Responsibility (CSR) and adherence to current regulatory federal mandates. 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Sarbanes-Oxley has profoundly impacted both management and accountantsRead MoreThe Sarbanes Oxley Act Of 2002 Essay1605 Words   |  7 Pagestime to protect investors and consumers alike. A brief overview of the Sarbanes-Oxley Act of 2002, a discussion of some of the provisions therein, opinions of others regarding the act and also my personal and professional opinion will be discussed below. The same will be examined about the Dodd-Frank Wall Street Reform and Consumer Protection Act. Senators Paul Sarbanes and Michael Oxley were the sponsors of the Sarbanes-Oxley Act of 2002, which represented a tremendous change to federal securitiesRead MoreInternal Auditing : Corporate Fraud, Greed For Power, Money, And Influence1165 Words   |  5 PagesThe purpose of this research is to provide a summary outline on internal auditing by uncovering motives behind corporate fraud, executives greed for power, money and influence. These issues will include a transitory story of the Archer Daniels Midland Company (ADM) scandal which results in fraudulent corporate practices using the fixed pricing scheme. If internal auditing practices were implemented at ADM may have saved investors and customers millions of dollars. This topic shifts to company responsibilitiesRead MoreSarbanes Oxley Act, An Overview Essay915 Words   |  4 Pagesexplain to you some important changes in the accounting field relating to Sarbanes Oxley Act, also called SOX. In July 2002, The US Congress enacted the Sarbanes Oxley Act, Also known as the Public Company Accounting Reform and Investor Protection Act (in the Senate) and Corporate and Auditing Accountability and Responsibility Act (in the House). Co-authored by U.S. Sen. Paul Sarbanes of Maryland and U.S. Rep. Michael Oxley of Ohio. (Slaughter, 2015). This legislation requires â€Å"help curb financialRead MoreThe Sarbanes Oxley Act ( Sox )969 Words   |  4 Pageschanges in the accounting field Due to my position as your Financial Adviser, it is my duty to explain to you some important changes in the accounting field and the legislation that brought about this change. In 2002 the U.S. Congress passed the Sarbanes-Oxley Act of 2002 (SOX), a legislation put in place not only to improve the accuracy of corporate disclosures, but also to protect shareholders and the general public from accounting errors and fraudulent practices in all organizations. Although these