Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
¶ … accounting discipline has taken a public relations beating over the past few years as a result of scandals in corporate accounting; much of this abuse has been well-deserved. Regulations regarding conflicts of interest, independent monitoring, reporting, and full disclosure to stockholders were thin at best, and in many cases were not enforced even when they did exist. The corporate accounting scandal wave changed that; public outcry for accountability resulted in Congress passing the Sarbanes-Oxley Act of 2002. This act contains many new regulations that have a profound effects on publicly traded companies, and that will directly affect this team and your corporation.
First, a quick summary of the actors involved: the FASB, or Financial Accounting Standards Board, and the Securities Exchange Commission, or SEC, have a mutually reciprocal relationship. The FASB issues standards regarding accounting standards which the SEC enforces; although the FASB is not an official government body (it operates independently), its standards of Generally Accepted Accounting Principles govern the operations of accounting throughout...
The SEC, as the enforcement and investigative arm of the government in the financial arena, basically enforces the standards produced by the FASB. A third actor, the Public Company Accounting Oversight Board. This independent board was created as a result of the Sarbanes-Oxley Act, to independently monitor and regulate accounting practices in the public realm. The PCAOB is a non-profit, private corporation whose only purpose is to protect the public by ensuring full transparency and accurate reporting by publicly-held corporations.
With those three actors in mind, let us examine the Sarbanes-Oxley Act (SOX) itself. Obviously, the question on everyone's immediate mind is how much the independent audits and employee man hours will cost. Some figures note that the average audit last year was an average of $2.4 million higher (Economist). The high prices can partly be attributed to the shortage of experienced auditors, leaving a few to do the work of the many (and charging in kind!). The cost is far and away the most obvious drawback to the SOX's implementation.
The benefits to…
When this happens, actuaries can use the data that was collected to provide a clear picture of what is taking place inside the various segments of the firm. ("Sarbanes-Oxley Act") (Holland) Obtaining a complete list of all business units is where the off the books activities and any type of outside partnerships are disclosed to managers. This helps them to determine the extent of these arrangements on the company and
Analyzing a Personal Accounting Ethical SituationMaterial MisstatementsThis memo is to address the fact that what appear to be material misstatements have appeared in our company�s financial statements.As a publicly traded company, we have a legal and ethical duty to inform investors and stakeholders of potential fraud.While our external auditor is unaware of these material misstatements, they have come to my attention and it as a legal accountant that it is
The company's efforts to sell globally make this aspect of their ethics and online initiative programs noteworthy according to Saywell (2002, May). The use of online initiatives to protect intellectual property rights online, in addition to the protection of line data is well documented in the analysis completed by Sears (2006, July) and Pollach (2003) as well. Lockheed-Martin uses a series of proxy servers to protect online data, and
CPA Advice for Homer Simpson Homer Simpson FROM: CPA & Associates Economic Substance and Moe's Business Plan Mr. Simpson: I appreciate your contact regarding economic substance and my recommendations as to if you should enter Moe's business plan. With such a large amount of cash taxed on your latest success, it is only obvious that you would want to protect and profit off of what remains. However, one must do so in good ethical standing.
From this broader perspective and in their planning and operations they have changed the term 'stockholder' to 'stakeholder' to cover employees, customers, suppliers and the community at large. With the growing complexity and dynamism brought about in business, organizations understood they required more guidance to guarantee that their dealings aligned with the overall good and did not pose any harm to others and with this was born business ethics.
Audit Quality and Agency Theory Auditors have existed since the 1300's and for most of that time, their role remained the same. Auditors were the life-line of governments and businesses, helping establishments maximize profit and efficiency, the benefits of which were enjoyed by everyone. As time passed, auditors were given new roles and worked routinely to assure the maximum profit of the company that employed them. In the past 50 years, however,