Financial Statements and Public

Financial Reporting and Analysis Accounting Quality The Sarbanes-Oxley (SOX) Act was created with the intent of improving the quality of accounting, reliability of financial statements to investors, and providing oversight to accounting professionals through the creation of a new federal agency, Public Accounting Company Oversight Board (PACOB). Create an argument supporting whether SOX achieved these goals, and whether financial data reported today is more accurate and reliable than prior to the Act. Provide support for your rationale SOX has been successful, and is comprehensively credited for firming up different areas.

One of these areas encompasses CFO and CEO responsibility and accountability regarding all financial disclosures and associated controls. A second aspect encompasses increased competence and commitment on the part of corporate audit committees. Overall, SOX has been quite effective and successful in increasing focus and emphasis on a strong ethical organizational culture in companies (Verschoor, 2012). One of the positive impacts of the SOX Act is that it caused a decline in the number of financial restatements done by companies.

In addition, the Act has also brought about a major decrease for class actions filed in terms of securities in the past few years, which implies companies have taken much caution (Harwood and Simmons, 2012). In addition, the Sarbanes-Oxley Act is deemed as a representation of success and accomplishment when bearing in mind the benefits that go along with compliance. Assess the impact to the Public Accounting Profession with the creation of the PCAOB and the inability of the profession to be self-regulated.

Indicate your level of support for the federal regulation of the profession. Provide a rationale for your response The Public Company Accounting Oversight Board (PCAOB) was constituted to oversee the audits of public corporations' conformance to the Sarbanes-Oxley Act (SOX). PCAOB was formed so as to safeguard not only the investors but also the general public to not only have accurate but also independent audits (PCAOB, 2016).

I have a great deal of support for the federal regulation of the profession as it has led to a significant decline in financial scandals. The PCAOB has had a positive impact on the profession. In particular, the PCAOB has issued several general reports, practice strictures for staff as well as other public documentation that shed light on a variety of outcomes that come about in the course of inspections of public companies.

In response to these aspects, different regulators have taken enforcement actions with respect to the violation of these particular standards and associated laws and regulations (Franzel, 2014). Restated Financial Data Assess the impact to public trust when a publicly traded company restates its financial data, indicating how negative impressions may be minimized. Provide support for your rationale When a company resorts to repeated financial restatements, it has an adverse impact on public trust; the public consider such actions to be a form of cover up or malicious actions.

Various actions can be undertaken to minimize negative impressions. One element is providing statements that substantiate the nature of the issue, offering clarifications to analysts and aids better reception by the public. Another action is communicating openly right from the start. This offers more information and gives rise to the consumers assuming that the problems are less prevalent. Another action is for the executive managers to take blame as the lack thereof is bound to erode public trust even further. A company also ought to take corporate governance measures.

In particular, the firm should demonstrate not just its dedication to corporate governance but also its capacity to take fitting and suitable measures is vital. This is because such measures curtail fears that the company will operate with malevolent intent henceforth. In addition, diligently abiding by policies and regulations subsequent to the need for a restatement facilitates a company in rebuilding trust, seemingly for the reason that the market yet again becomes more confident that future occurrences of spiteful intent will be avoided (Walker, 2009).

Evaluate the current trend of companies restating financial statements. Indicate the key drivers of this trend. Predict the trend over the next five years, providing support for your rationale The current trend of companies in restating their financial statements is to make certain that the published and reported financial data and information are in tandem and adhere with the rules and recommendations and standards set by the PCAOB. Recommendations given by the audit committee with respect to regulations set causes the prevailing trend of companies restating financial statements.

My prediction of the trend over the next five years is that there will be less financial restatements because the companies will already be aware of the regulations and rules and implemented by the PCAOB (PCAOB, 2016). Forecasting Assess the financial performance forecasting process, identifying the assumptions made that are most likely to cause a gap between the forecast and actual performance. Indicate how these gaps may be minimized.

Provide support for your rationale One of the key assumptions, probably bound to create a gap between actual and forecast performance is that any forecasting is centered on historical data and that there is no distinct way of being able to project what is bound to take place in the forthcoming periods. Therefore, owing to instances such as unexpected events that steer away from the prediction can give rise to a gap between the forecasted performance and actual performance. These variances can be minimized by constantly updating the data constantly.

For instance, if the forecast is for a financial year, then the forecasts can be updated every time, for instance, after every financial quarter in the financial year (Nickolas, 2015). Create an argument supporting the value of forecasting to an organization. Provide support for your argument Forecasting is an approach or technique for projecting and approximating several future aspects of an organization. Forecasting is of great value to an organization.

In particular, the longstanding success of an organization is closely linked to how well its management is capable of projecting its future and to develop fitting strategies to cope with probable future scenarios. For instance, efficacious sales forecasting can augment the financial health of an organization and give rise to satisfaction of both consumers and personnel. Forecasting enables an organization to consider future trends within the market and economy and in turn make it much more possible for an organization to ready itself with such instances (Reference for Business, 2016).

Dividends Assess the market and shareholder behaviors when a publicly traded company makes the decision not to pay dividends to its shareholders, suggesting how management should react to these behaviors. Provide support for your rationale The manner in which the market and the stakeholders behave when a publicly traded company decides not to pay out dividends is dependent upon the underlying reasons. For starters, the dividend payout by the company serves as a declaration of the company's success.

Therefore, when a publicly traded company decides not to hand its shareholders a dividend payout, it is construed that the company's performance has been poor and hard times coming ahead for the company (Jais et al., 2009). As a result, the shareholders will be spooked by this decision and therefore their imminent behavior will be to sell their shares. This move will cause other investors to not invest in such shares and therefore will cause a decline in the market price of the company's shares.

The manner in which the management should react to this is to come out and declare the precise reasons for the lack of dividend payout, for instance, the purposes of funding expansion and development of the company. The rationale for this is to ensure that the fears of shareholders and other investors are allayed and prevent them from selling their shares in the company (Boyte-White, 2015). Evaluate the factors that an investor may consider when deciding whether or not to invest in a company with a policy of non-dividend payments.

Indicate whether or not you believe this a prudent choice for some investors. Provide support for your rationale. For any investor, the main purpose of investing in a company is to attain a sound and sensible return from the investment. Investment returns on a company come in two forms. The first one is the dividend income accrues after the end of a fiscal year whereas the other is the profit attained from a.