Verified Document

Accounting Industry Has Been Facing Increasing Amounts Essay

¶ … accounting industry has been facing increasing amounts of scrutiny. This is because a number of high profile scandals (i.e. Enron and World Com) were brought to attention of regulators (based upon the need for increasing oversight in this area). As a result, the Sarbanes-Oxley Act of 2002 was implemented. However, since this law was first enforced, a number of firms are claiming that its restrictions are an added burden (for large multinational corporations). This is creating situations where individuals could still engage in unethical practices. To fully understand what is happening requires looking at potential conflicts. Once this takes place, is when it will highlight the impact of these activities on firms. The Effect of Sarbanes-Oxley on Financial Statements

The effect of Sarbanes-Oxley on financial statements is that it is forcing firms to provided added disclosures to investors. This occurs with the CEO and CFO certifying under oath that the financial information...

Moreover, there are limitations as to the kinds of loans that officers and directors are able to receive from the firm. The long-term impact is that this financial information is: providing more transparency and it is easier to understand. ("Sarbanes-Oxley Act 2002," 2006) (Frankel, 2012)
However, with the current law in place, there is still the possibility that someone could circumvent these provisions. For example, suppose that the CEO of the company has another corporation they started (by making themselves the majority shareholder). They could use this entity as a way to go around Sarbanes-Oxley. In this case, they could ask the board of directors to loan their firm a certain amount of money. The fact that this is set up as a separate legal entity, means that the company is not breaking the law by engaging in this practice. ("Sarbanes-Oxley Act 2002," 2006) (Frankel, 2012)

Yet at the same time, the CEO…

Sources used in this document:
References

Sarbanes-Oxley Act 2002. (2006). SOX Law. Retrieved from: http://www.soxlaw.com/

Frankel, A. (2012). Wal Mar's Sarbanes-Oxley Problem. Reuters. Retrieved from: http://www.reuters.com/article/2012/04/23/us-frankel-walmart-idUSBRE83M1GQ20120423
Cite this Document:
Copy Bibliography Citation

Related Documents

International Harmonization of Accounting Standards:
Words: 4450 Length: 13 Document Type: Research Proposal

This is important, because it shows how there is the potential for both harmonization and division. Yet, once you look at what is taking place around the world, it is obvious that a common set of ideas are being readily accepted in different countries around the world. A good example of this can be seen by looking no further than China, where they announced that the country would follow IFRS

Strategic Perspectives Sberbank Over the Last Several
Words: 2914 Length: 8 Document Type: Case Study

Strategic Perspectives Sberbank Over the last several years, the banking industry in Russia underwent a major transformation. As the traditional institutions of the past, have been evolving into global financial centers. This is because they are reaching out to new demographics of customers, in an effort to participate in the rapid growth that is taking place throughout the former Soviet Union. In the case of Sberbank, they have been taking their

Ethical Issues in Nursing Over the Last
Words: 1363 Length: 4 Document Type: Essay

Ethical Issues in Nursing Over the last ten years, the demand for long-term care services has been facing increasing amounts of pressure. Part of the reason for this is because of the large portion of the population that is becoming older (the Baby Boomers). As they have the potential to cause the overall amounts of demand to increase dramatically. Evidence of this can be seen with information compiled by the Government

Trade Show Industry in Germany
Words: 31155 Length: 113 Document Type: Dissertation

Significance of the Study This study is significant because it sheds light on a very important contributor to local and international trade. Trade fairs have a long history in providing a meeting place for buyers and sellers. They are an important channel of communication for B2B buyers and sellers. This is a significant area for study because there are limited channels of communication between B2B buyers and sellers. The previous sections

Why Did the Dot Com Industry Crashed After the Boom
Words: 11033 Length: 40 Document Type: Term Paper

Com industry crash after the boom This is a paper examining some of the factors that caused the dot-com crash Many believe the root cause of the dot-com crash was over valuation of stock prices relative to the actual underlying value of the companies themselves. Stocks of Internet companies traded at Price-Earning ratios of higher then 30, buoyed by a speculative bubble. When reality set in for investors many realized that

Internationalization of Branding in the Retail Industry
Words: 16085 Length: 60 Document Type: Term Paper

The main focus of the 1980s regarding brands focused on a trend in takeovers, enabling successful brands to become extremely valuable on the open market. Even very early on, a value associated with a brand large was viewed in part as more important than the product itself. Early research indicates that many thought the only way to have a successful brand was to buy one. Many felt that the

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now