294 results for “Sarbanes Oxley Act”.
The objective of this study is to read the guide to the Sarbanes-Oxley Act and to: (1) Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over minimizing the corporate fraud and protecting investors make one suggestion for improvement; (2) Given the oversight of the accounting profession by the PCAOB as a result of the Sarbanes-Oxley Act, assess the impact on auditing firms and the public accounting professions; (3) state an opinion as to whether the writer of this work believes that the accounting profession is better off being self or government regulated with regard to a firm's ability to detect and report corporate fraud. Support for your position; and finally to (4) Predict whether or not corporate fraud will be reduced, increase, or remain the same based on requirements for audits of publicly traded companies as prescribed in the Sarbanes-Oxley Act.
Overview of the Sarbanes-Oxley Act
Sarbanes-Oxley Act (2003) Soxlaw Website. Retrieved from: http://www.soxlaw.com /introduction.htm
The Impact Upon the Accounting Profession
What it does
The Effect of Sarbanes-Oxley on the Accounting Profession
New Rules, New Practices
The past few years have remarkably changed the face of American business. Corporate scandals involving America's largest companies have shaken the confidence and trust that the public once had in big business. The desire to boost earnings has led some executives to commit crimes, in order to fatten their own pockets, at the expense of hard working employees, shareholders and stakeholders. The end result however, has proved disastrous. Workers have been laid off, thousands of people have lost their savings due to rapidly falling stock prices of their firm during rapidly imposed black out periods when employees were unable to pull their monies out. The collapses of Enron and WorldCom, as well as other well-publicized financial debacles, have led to an unprecedented level of attention paid to…
Commission Approves Rules Implementing Provisions of Sarbanes-Oxley Act, Accelerating Periodic Filings, and Other Measures." Retrieved on February 15, 2003 from website: http://www.sec.gov /news/press/2002-128.htm
How the Sarbanes-Oxley Act of 2002 Impacts the Accounting Profession." Retreived on February 13, 2002 at http://www.tscpa.org/welcome/SarbaneEffect.html
Paetkau, Tyler. "Employment Law Considerations Raised by Post-Enron, Sarbanes Act of 2002." Retrieved on February 12, 2003 from website: http://www.lawmemo.com/emp/articles/sarbanes.htm
Sarbanes-Oxley Act -- it's a good thing
n the wake of the horrible corporate scandals of recent years, including Enron and Arthur Anderson, it became readily apparent that some kind of regulation of ethics must be established. ndeed, any scandal in which large numbers of investors lose billions of dollars due to misconduct, is likely to bring action, and the Sarbanes-Oxley
Act of 2002 is just that. However, although much is said about the useful effects of the act on the economy in general (after all, the confidence of investors is one of the strongest key's to a robust economy), the impact on individual employee "whistleblowers" within corporations is perhaps the most striking with regard to the expression of personal business ethics and responsibilities, as well as the effectiveness of the Act itself.
Most people consider the Sarbanes-Oxley Act, or "SOA" to be an excellent example of the much needed…
In short, the Sarbanes-Oxley act is a powerful, and much needed addition to the laws governing publicly traded companies. However, the most significant aspect of the Act is its provisions for whistleblowers. After all, when the Martha's of the world have employees looking over their shoulders, they might think twice before acting unethically. Sure, imposed ethics are poor shadows of authentic integrity -- but an investor will take what he or she can get, as long as it prevents the loss of all they have invested in good faith.
Gamble, John. Sarbanes-Oxley. Retrieved from Web site on 03 March, 2004
hile most Americans know the names Enron and orldcom, fewer know the term Sarbanes-Oxley Act; however, despite the alarming impact of the two business disasters, the potential impact of Sarbanes-Oxley stands to exceed the impact of those two bankruptcies many times over. hile Enron and orldcom each held a claim to 'biggest' or 'most' in some aspect of global business and also in various aspects of global business disaster, when it was over, it was over.
That is not so with the Sarbanes-Oxley Act, or any law passed by the U.S. government, in fact. Laws tend to remain on the books once they get there, with their requirements bedeviling generations of Americans. In some respects, the Sarbanes-Oxley Act has a great deal in common with the U.S.A. PATRIOT Act; both were passed extremely quickly in reaction to events that frightened the American public. It is easy to wonder…
"Bad Stock Market Medicine." The Washington Times 19 Dec. 2002: A21. Questia. 5 Dec. 2004 .
Bennett, Drake, and Alex Gourevitch. "Put a Face on Your Fears: The Apprehensive Citizen's Guide to the New Republican Committee Chairmen of the U.S. Senate -- And What They Have in Store for Us." The American Prospect 30 Dec. 2002: 20+. Questia. 5 Dec. 2004 .
"Criminalizing Business." The Washington Times 23 Oct. 2002: A16. Questia. 5 Dec. 2004 .
"Good Governance Is Good Business." Canadian Speeches Mar.-Apr. 2003: 59+. Questia. 5 Dec. 2004 .
Sarbanes-Oxley Act (SOA) was put into law in 2002 following the revelations that Enron (and Enron's accountancy Arthur Anderson), orldCom, and other corporations were using blatantly corrupt practices in accounting and causing huge losses for stakeholders in those firms. Moreover, the U.S. Congress could not simply stand by and allow companies to use unethical and illegal practices to scam huge sums of money for corporate executives while stripping the IRAs and other savings plans for stakeholders. Basically, the SOA was legislation that attempted to stop this aspect of corporate fraud: the illegal accounting practices that were in place and resulted in the collapse of orldCom, Enron, and other firms.
hat specifically does the Sarbanes-Oxley Act set out to do?
It is an understatement to say that there were major chances needed to the regulation of financial practices in corporate America. And following the investigations into corrupt practices at Enron, et…
DeVay, Debra. (2006). The Effectiveness of the Sarbanes-Oxley Act of 2002 in Preventing and Detecting Fraud in Financial Statements. Boca Raton, FL: Universal-Publishers.
Fletcher, Wilma H., and Plette, Theodore N. (2008). The Sarbanes-Oxley Act: Implementation,
Significance, and Impact. Hauppauge, NY: Nova Publishers.
Orin, Richard M. (2008). Ethical Guidance and Constraint Under the Sarbanes-Oxley Act of
Evaluating the effectiveness of the Sarbanes-Oxley Act
The Public Company Accounting eform (PCA) and Investor Protection Act (IPA) was established in mid-2002 by the congress with the emergence of unceremonious scandals in accounting practice that resulted in firms going bankrupt and losing huge stocks in the stock market (Prentice & Bredeson, 2010). This act is what is referred to as Sarbanes-Oxley act of 2002. The act also led to the establishment of the Public Company Accounting Oversight Board (PCAOB), whose function is to oversee the accounting practice industry.
The Sarbanes-Oxley act was established with intend of preventing the clash of interest which resulted in fraud. The auditors are prohibited from consulting for the auditing clients that engage in fraud (Welytok, 2006). It also gives the people who blow whistle on the individuals practicing these activities security of their jobs. Moreover, it banned the issuing of loans to the…
Welytok, J.G. (2006). Sarbanes-Oxley for dummies. Hoboken, NJ: Wiley.
Holt, M.F. (2008). The Sarbanes-Oxley Act: Costs, benefits and business impact. Amsterdam:
Bauer, A. (2009). The Enron scandal and the Sarbanes-Oxley-Act. Mu-nchen: GRIN Verlag.
Literature on the Sarbanes-Oxley Act of 2002
The field of specialized literary reviews on the Sarbanes-Oxley Act is a widely spread one presenting numerous issues form various standpoints. Reviewers' opinions vary based on their position towards the bill and their prior professional expertise on white-collar crimes.
Among the mostly appreciated and close to reality works are: The Impact of Regulatory Information Disclosure on Information Security Investments, Competition and Social Welfare by Anindya Ghose at New York University and Uday Rajan at the University of Michigan; Serbanes-Oxley Whistleblower Cases, by Philip M. erkowitz and the Sarbanes-Oxley Act of 2002 and Current Proposals by NYSE, Amex and NASDAQ.
The Sarbanes-Oxley Act of 2002 was passed in order to better supervise the actions within the business department. The Senate and the House of Representatives felt the crucial need for such legislature due to the increased number of white-collar fraud cases in…
Wikipedia, the Free Encyclopedia, Sarbanes-Oxley Act, postedon October 18, 2006, http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act,last accessed on October 21, 2006
Warren W. Hamel, Esq. Venable Howards, it's Not Just Enron: A Guide to the Sarbanes-Oxley Act for Nonprofit Organizations
Larry E. Ribstein, Corporate Governance at Crossroads: Sizing Up SOX, Draft of January 18, 2005
Anindya Ghose and Uday Rajan, the Economic Impact of Regulatory Information Disclosure on Information Security Investments, Competition and Social Welfare, Submitted to Workshop on Economics of Information Security, March 2006
The integrity of the financial sector of these organizations controlled by state agencies and related services, would improve. The provisions offered by the act would serve as models based on which standards for other non-profit organizations can be developed in the future. It will create a better understanding of the limitations placed on auditors and a deeper scrutiny of the financial and transaction statements presented by the auditors. hile the business governance rules do help out universities to good extent in avoiding scandals, generalizing all sections would not help.
Surveys have been conducted to determine the extent to which the Sarbanes-Oxley act should be implemented in universities and colleges. One of the studies revealed that around half of the respondents think that incorporating certain sections of the act would be a good idea. A research carried out by the corporation PricewaterhouseCoopers' named "Taking the Right Patii" brought together the presidents…
Champy, J.(2007, May 8) Sarbanes-Oxley advice for smaller public companies. Retrieved June 2,2010 from http://searchcio.techtarget.com/news/column/0,294698,sid182_gci1253631,00.html
Sarbanes-Oxley on Trial. Retrieved June 2, 2010 from http://online.wsj.com/article/SB10001424052748704107104574571662869948676.html
Freeman, J.(2009, Dec 15) the supreme case against Sarbanes-Oxley. Retrieved June 3,2010 from http://online.wsj.com/article/SB10001424052748704431804574539921864252380.html
Mello-e-souza, C and Awasthi, V.(2009,April) Probing financial statements in a post-Sarbanes-Oxley world. Retrieved June 3, 2010 from http://findarticles.com/p/articles/mi_hb6421/is_10_90/ai_n31947078/
The investors got intoxicated by fraud happened to them because of greedy people. Thousands of employees left as the stock market went to the peak but most of them left their jobs due to low pay as well. (Kerry Hannon, July 6, 2005) bill was passed by the President ush after the corporate fraud nearly just after three weeks on April 25, 2002. It referred to the Senate anking Committee which was clearly supported by the president and SEC. The bill was passed for the corporate fraud, regulatory board with investigative, enforcement powers to check out the accounting company, securities and laws for accounting and also to punish the corrupt auditors. However, more than 200 federal prosecutors were involved in this fraud. At the same time, the chairman of the committee, Senator Paul Sarbanes also prepared a bill which was passed on June 18, 2002 to the Senate anking Committee.…
Ca. (November 2006). Sarbanes-Oxley Act and Its Impact on it Organization. Retrieved on November 20, 2007 at http://www.ca.com/files/WhitePapers/sarbanes_oxley_impact_on_it_whitepaper.pdf
Grinberg, Elina. (2007). The Impact of Sarbanes-Oxley Act 2002 on Small Firms. Retrieved on November 21, 2007. http://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=1055&context=honorscollege_theses
Hannon, Kerry. (June 6, 2995). Book Looks at How, Why U.S. Investors were 'Robbed Blind' Retrieved on November 21, 2007 http://www.usatoday.com/money/books/reviews/2005-06-13-robbed_x.htm
Pozgar, George. Legal Aspects of Health Care Administration.
I agree with the points presented in the Sarbanes-Oxley and Public Company Accounting Oversight Board (PCAOB) essay. Investors and portfolio managers are typically outsiders when it comes to internal financial matters within companies. In order to make informed decisions, they must rely on the good faith and due diligence of corporate insiders. The Sarbanes-Oxley Act offers protection by interjecting ethical behavior and integrity in the public company management and auditing process. Signed into law by President Bush on July 30, 2002, it offers the most massive across the board changes to securities law since the 1930s (Weinberg, 2003). The PCAOB was established to oversee auditors and put severe restrictions on questionable financial reporting and processes.
The strength of U.S. securities regulation is ultimately dependent on disclosure. The best way to protect investors from fraud is to require companies selling stocks and bonds to the public to disclose detailed…
Weinberg, J.A. (2003). Accounting for Corporate Behavior. Economic Quarterly (10697225), 89(3), 1-20.
IntroductionFrom the onset, it would be prudent to note that the Sarbanes-Oxley Act remains a rather instrumental law in efforts to reign in corporate fraud and further enhance reliability in the realm of financial reporting. The said act was passed in the year 2002. This text concerns itself with not only the significance of this particular piece of legislation, but also the reason as to why it was passed. Amongst other things, the paper will also consider how knowledge of the various provisions of the act would enable one to promote corporate governance in an organization.DiscussionWhy the Sarbanes-Oxley Act was PassedFletcher and Plette (2008) make an observation to the effect that this particular act was necessitated by the numerous financial scandals that appeared commonplace following our march into the 21st century. Some of the most prominent scandals in this case involved firms that were publicly traded, including but not limited…
Anand, S. (2011). Essentials of Sarbanes-Oxley. John Wiley & Sons.
Fletcher, W.H. & Plette, T.N. (2008). The Sarbanes-Oxley Act: Implementation, Significance, and Impact. Nova Publishers.
Kieff, F.S. & Paredes, T.A. (2010). Perspectives on Corporate Governance. Cambridge University Press.
The Sarbanes-Oxley Act: Compliance Hazards and Ethical DilemmasThe critical components of compliance with the Sarbanes-Oxley Act include the acknowledgement of responsibility by CEOs and CFOs for all financial reports, the issuance of regular internal control reports by the publicly-traded organizations that must abide by the Act, data security compliance with appropriate controls, and documentation of compliance (What is SOX Compliance, 2019). One significant compliance hazard which has emerged in the era of COVID-19, however, is the difficulty of instituting timely financial reports, given the delays, increased uncertainty, and heightened risk in the volatile international environment where outbreaks and lockdowns still continue to abound (Christensen, 2019). There may be an ethical dilemma between protecting employees from being exposed via social distancing and the ethics of compliance with reporting.SOX likewise requires careful monitoring of sensitive data controls, to minimize the risk of identity fraud (Cryer, 2019). Yet many companies have been sluggish…
Christensen, B. (202). Voices: Assessing SOX compliance risk in the coronavirus environment.
Accounting Today. Retrieved from: https://www.accountingtoday.com/opinion/assessing-sarbanes-oxley-compliance-risk-in-the-coronavirus-environment
Cryer, W. (2021). What is SOX cybersecurity compliance? Audit Board. Retrieved from:
The Sarbanes Oxley Act - Ethical Dilemmas in the Banking IndustryThe Sarbanes Oxley Act poses various dilemmas in its execution in the financial industry. Particularly in its implementation in the spheres of corporate governance. The first involves nonprofit organizations where its effectiveness is dependent on the ethical values of executive leadership. While the Act requires constant reporting and monitoring of the financial operations, it relies on the integrity of the leaders who serve the oversight roles in those organizations (Hess, 2007). The fiscal integrity attached to the Act's objectives is only valid if relevant structures are implemented at every level. That is, there must be ethical considerations in the culture and norms of the organizations for both informal and formal settings. The Act assumes that the organization correctly does auditing to help protect investors and other shareholders from fraudulent reporting (Hess, 2007). The organization's declaration to abide by the Sarbanes…
Heminway, J (2008). Does Sarbanes-Oxley Foster the Existence of Ethical Executive Role Models in the Corporation?, 3 J. Bus. & Tech. L. 221
Hess, D. (2007). A Business Ethics Perspective on Sarbanes-Oxley and the Organizational Sentencing Guidelines. Michigan Law Review, 105(8), 1781–1816. http://www.jstor.org/stable/40041566
1. If jail time is off the table for executives, that would be an odd choice. Sarbanes Oxley creates disincentives for esecutives to commit fraud, such as in Enron. The point of SOX was really to add extra regulatory teeth, added punishments for executives committing fraud, under the knowledge that most major fraud is committed with the approval of executives, or driven by them. Folks lower down don’t have the access, nor the equity-based compensation packages, that would motivate or facilitate fraud without senior executive knowledge or initiation. As such, a law that takes jail time off the table would be pointless, as the incentives to commit accounting fraud are largely financial in nature, and therefore any punishment that simply involves fines or forfeiture of assets will invariably end up with a punishment lower than the proceeds of the crime. The point of jail time is to provide a deterrent…
Quality and Reliability in Financial Reporting
Publicly-traded companies have an obligation to provide accurate and reliable financial statements to current and potential investors. Investors and others users of financial statements depend on this information to make investment and business decisions (McEwen, 2009). The Sarbanes-Oxley Act (SOX) and the Securities and Exchange Commission (SEC) acknowledge the importance of truthful, material, and dependable financial reporting. Based on SOX provisions and SEC reporting requirements, this paper discusses the significance of ensuring quality and reliability in financial reporting. The paper specifically focuses on the role of the board of directors and the chief executive officers (CEO) in ensuring the reliability of financial statements, strategies a CEO can use to ensure quality and reliable financial reporting, and how corporate management can increase investor confidence in financial reporting. Attention is also paid to possible consequences to a publicly traded company due to unreliable financial reporting as…
Sarbanes-Oxley Act on Internet security systems
As well as impacting accounting, the Sarbanes-Oxley Act also had a significant impact upon IT security: "Each organization that is affected by the Sarbanes-Oxley Act has some level of reliance on automated information systems to process and store the data that is the basis of financial reports. The Act requires these organizations to consider the IT security controls that are in place to promote the confidentiality, integrity, and accuracy of this data" (Byrum 2003: 3). All security controls protecting such data must be analyzed for effectiveness: acceptable controls may include flagging multiple login attempts and restricted data accessibility for all data covered by the Act (Byrum 2003: 4). This ensures that financial information is less likely to be tampered with, a critical concern of SOX.
The Act does not specify which types of controls are required given that this will vary with the needs…
Byrum, S. (2003). The impact of the Sarbanes-Oxley Act on Internet security. SANS.
The question is then, how far legislation should go to avoid future scandals such as Enron and other major companies. It appears that the current constraints, especially in terms of business operation, and particularly as these manifest within the medium and small business sector, are somewhat excessive. Although the argument relating to a company's choice regarding the cost/benefit ratio is noted, surely a single piece of legislation cannot be universally applied with fairness.
In conclusion therefore, the need for legislation regarding auditing practices within public companies is vital. The extent and nature of the current legislation however can benefit from considerable revision. Indeed, the scale of costs to medium and small companies should be mitigated by providing institutions and tools that target auditing processes within these companies. Furthermore, the legislation should be revised in such a manner that it does not detract from healthy business practices such as competition, operations,…
The statute of limitation for the discovery of fraud is increased to two years from discovery date and five years following the act. Criminal penalties for securities fraud was increased to 25 years, by SOX.
Each public company's CEO and CFO must certify financial statements and reports. Personal loans are banned, to executive officers and company directors, with the enactment of SOX. It is also now required to accelerate reporting of insider trading ("H.. 3763").
In addition, SOX now prohibits insider trading during pension fund blackouts. Compensation and profits for the CEO and CFO must be made public.
Auditor independence is now specifically required. and, American companies must have an internal audit function, that is certified by external auditors. Audit firms are prohibited from providing services, unrelated to their audit work, to clients. One of the most important provisions is an increased accountability, holding CEOs and directors accountable, for crimes…
Beard, D. & Wen, H. "Reducing the Threat Levels for Accounting Information Systems." The CPA Journal. May 2007. New York State Society of CPAs. December 3, 2007 http://www.nysscpa.org/cpajournal/2007/507/essentials/p34.htm .
Collins, J. "15 Key Provisions of Sarbanes-Oxley." Microsoft Dynamics. 10 Nov 2004. Microsoft. December 3, 2007 http://www.microsoft.com/dynamics/nav/product/navision_15_major_sox_provisions.mspx.
H.R. 3763. 23 Jan 2002. Government Printing Office. December 3, 2007 http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:h3763enr.tst.pdf .
Lucci, J. "Enron - the Bankruptcy Heard Around the World and the International Riccochet of Sarbanes-Oxley." Albany Law Review 67(1) 2003: pp. 211-249. Academic Search Premier. EBSCOHost. University of Phoenix, Phoenix, AZ. December 2, 2007 http://web.ebscohost.com .
If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important rule that would have had an impact upon Enron is the rotation rule. The lead and concurrent audit partners cannot stay on a particular public company for more than five years, they must continually rotate. Had this rule been in place, Arthur Anderson himself who sat twenty years on Enron would not have had the opportunity to conduct deceit and destroy documentation.
The primary aspect of OX in application to preventing scandals such as Enron is provide much more repercussions for corporate finance abuse and more importantly, for greater responsibility for all parties involved in audits. The audit committee of all public companies are now required to overview all audits that are being conducted. In addition, CEOs and CFOs of public…
SOX would have had a major impact upon Enron because it provides many filters in which to catch corporate finance disclosure and duplicity. The creation of a public company accounting oversight board was the first major step of SOX. This board is designed to preventing auditing abuses. The board registers, oversees, investigates and disciplines all accounting firms that auditing public companies. As a result, it provided a level of supervision on accounting firms that was not there at the outset. In addition auditing standards were established across the board which put much more accountability in the hand of auditors and held them accountable to be checked by a national level committee. One of the key reasons that the Enron scandal occurred is because the accounting firm, Arthur Anderson, earned more from Enron in consulting services than in auditing. Therefore they were willing to compromise their integrity in order to preserve their consulting business. The new policy prohibits auditors from "contemporaneously" providing companies with both auditing and specific types of consulting services. If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important rule that would have had an impact upon Enron is the rotation rule. The lead and concurrent audit partners cannot stay on a particular public company for more than five years, they must continually rotate. Had this rule been in place, Arthur Anderson himself who sat twenty years on Enron would not have had the opportunity to conduct deceit and destroy documentation.
The primary aspect of SOX in application to preventing scandals such as Enron is provide much more repercussions for corporate finance abuse and more importantly, for greater responsibility for all parties involved in audits. The audit committee of all public companies are now required to overview all audits that are being conducted. In addition, CEOs and CFOs of public companies are required to personally certify accuracy for their financial reports. This holds them accountable and provides significant penalties for false certifications. These safeguards, if they were in place with Enron would have put much more reasonability and consequences upon the actions of the CEO and CFO, thus possibly deterring their actions. In general the criminal punishments associated with obstruction of justice and securities fraud. As a result, the deterrents in place may have well have deterred Enron, Anderson and all other parties involved to reconsider their actions.
The Role of Empirical Evidence in Evaluating the Wisdom of the Sarbanes-Oxley Act, 40 University of San Francisco Law Review 823-844 (2006) http://eprints.law.duke.edu/archive/00000840/" Public and Private Enforcement of the Securities Laws: Have Things Changed Since Enron?, 80 Notre Dame Law Review 893-907 (2005) (with Randall S. Thomas)
Sarbanes-Oxley Act was enacted to facilitate in guaranteeing the correctness of financial reporting by the public listed companies. In the stir of millions of dollars of investor's money going down the gutter because of their reposing faith on the financial reporting by companies who did not present the true picture as regards the financial state of affairs of the company, Sarbanes-Oxley was a response to the common citizen's clamor for change in this area. (Impact of Sarbanes-Oxley Act on Colleges/Universities) Basically, the Sarbanes-Oxley Act restructures the federal rules of public company corporate governance and the reporting compulsions intensifies norms of accountability in case of directors and officers, auditors, security analysts and legal counsel; and stipulates particular securities infringement to be offenses. (Sarbanes-Oxley Basics for Private Companies & Investors)
Sarbanes-Oxley looks for enhancing the correctness of financial reporting of publicly traded corporations. (Impact of Sarbanes-Oxley Act on Colleges/Universities) The Act is…
Accounting Experts Assess The Impact Of Sarbanes-Oxley. Retrieved from http://www.bowne.com/newsletters/newsletter.asp?storyID=880& src=BFPfeature Accessed on 26 April, 2005
Coustan, Harvey; Leinicke, Linda. M; Rexroad, Max. M; Ostrosky, Joyce. A.. Sarbanes-Oxley: What It Means to the Marketplace. Retrieved from http://www.aicpa.org/pubs/jofa/feb2004/coustan.htm Accessed on 26 April, 2005
Impact of Sarbanes-Oxley Act on Colleges/Universities. Retrieved from http://www.audit.gatech.edu/ei_sarbanes_oxley.htm Accessed on 26 April, 2005
Kulzick, Raymond S. Sarbanes-Oxley: Impacts on Financial Transparency. Retrieved from St. Thomas University. http://www.kulzick.com/rksoift.htm Accessed on 26 April, 2005
The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated last year in the Sarbanes-Oxley Investor Protection Act, which establishes new guidelines for the securities industry. Initially a Democratic brainchild, the act became favored by epublicans in the House when it was realized that such adjustments would be of great benefit to shareholder value in that they enhanced general financial stability. This is the most prominent piece of financial legislation since the establishment of the Securities and Exchange Commission in the early 1930's. The most widely recognized feature of the new legislation, which was introduced in 1992, is that board members are held personally and criminally liable for the accounting practices that the company employees. This act also establishes guidelines as to the coverage of securities by sell-side analysts who face…
Resources and Authority
Studies and Reports
Corporate and Criminal Fraud Accountability
White Collar Crime Penalty Enhancements
Corporate Tax Returns
The implementation of the Sarbanes-Oxley Act section 404 as federal law was a necessary step in order to regain public trust in the financial controls and reporting of companies. Huge corporate scandals, such as the ones affecting Enron, and WorldCom, shook the public to their core, and resulted in the demand for consistent measures that would make companies accountable for all financial operations. This legislation was necessary and useful, but the focus of the law may be off the mark.
Accounting practices may have unfairly received the blame for corporate scandals in recent years. As outlined by Lin and Wu (2006), the aim of the Sarbanes-Oxley Act section 404 is somewhat misguided, and is placing undue attention on accounting as the culprit in the case of these crimes. Instead, the focus of measures to improve accuracy and reliability of financial controls and reporting should be directed at management practices. The…
Lin, H.H. & Wu, F.H. (2006). Limitations of section 404 of the Sarbanes-Oxley Act. The CPA Journal, retrieved at http://www.nysscpa.org/cpajournal/2006/306/essentials/p48.htm .
Weirich, T.R. (2006). Sarbanes-Oxley Act and section 404: basics on internal control reports. The RMA Journal, 88(1), 28-34.
Sarbanes-Oxley Act, also known as the SOX, was passed in the year 2002 in the United States of America to not only strengthen and fortify the Corporate Governance of the country but also to re-install confidence in the average investor. The SOX Act was known as the Sarbanes-Oxley Act because the U.S. Senator Paul Sarbanes and the U.S. epresentative Michael Oxley sponsored it. The factors that led to the necessity of this act were that, primarily, there were a number of accounting as well as corporate scandals affecting the corporate structure of several famous and prominent companies of the U.S.A. As an inevitable result of these scandals, there was a loss of trust on the part of the people of America in the several different accounting and reporting practices in the corporate world of the United Sates of America. The Sarbanes-Oxley Act provides wider legislation facilities as well as sets…
Accounting Scandals of 2002. Retrieved From
Accessed on 28 November, 2004
Bristol-Myers Squibb. Retrieved From
The Sarbanes-Oxley Act (SOX) was passed in 2002 as a response to a wave of corporate accounting scandals. To measure the effectiveness of SOX over the past ten years, the objectives of the Act must be understood. The text of the Act states that its purpose is "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes." The accounting scandals of the late 1990s and early 2000s had undermined public confidence in the U.S. securities system, because investors were beginning to feel that the information contained in the financial statements could not be trusted. Congress felt compelled to address this situation by passing Sarbanes-Oxley, which creates more legal controls over the financial statements, creates an enforcement body (the Public Company Accounting Oversight Board) and creates new safeguards.
Small (2011) examines the effectiveness of SOX in improving the…
However, because of the costliness of this requirement, many believe it is especially unfair to small businesses who are already struggling to be competitive in an increasingly hypercompetitive, globalized economy.
As such, small, public companies have been given a temporary reprieve from some of Section 404's strict and costly requirements. In addition, there have been new guidelines set forth for auditors, with a hopes of reducing the cost of compliance of the Section, for all companies (Basilio, 2007; Grumet, 2007).
Bradford and Brazel (2007) note that these costs due indeed seem to be decreasing. In research they quote from AM, organizations spent $4.5 million on compliance with the Act, in 2004. This was reduced to $3.8 million in 2005, and further decreased to $2.9 million in 2006.
However, despite these decreasing total costs of compliance, the Act is still a costly requirement for public companies. Bradford and Brazel (2007) further…
Basilo, T. (Jan 2007). Reducing Sarbanes-Oxley compliance costs. The CPA Journal, 77(1). Retrieved December 11, 2007, from ProQuest database.
Bigalke, J. & Burrill, S. (Aug 2007). Time for a second look at SOX compliance. Healthcare Financial Management, 61(8). Retrieved December 11, 2007, from Business Source Complete database.
Bradford, M. & Brazel, J. Flirting with SOX 404. Strategic Finance, 89(3). Retrieved December 11, 2007, from ProQuest database.
Bumiller, E. (31 Jul 2002). Bush signs bill aimed at fraud in corporations." New York Times. Retrieved December 11, 2007, from Business Source Complete database.
Sarbanes-Oxley Act is a mandatory act passed in 2002. The legislation introduced significant modifications to the regulation of corporate governance and financial practice. The act was named after Senator Paul Sarbanes and epresentative Michael Oxley. They were the main architects of the legislation as well as the ones who set several of the mandates for compliance. There are eleven titles arranged within the act with compliance emphasized in sections 302, 401, 404, 409, 802, and 906. The Sarbanes-Oxley Act also brought establishment of an over-arching public company accounting board.
The Sarbanes-Oxley Act of 2002, along with altered exchange listing requirements, enforce uniformly high levels of external director supervision of all companies. Nevertheless, research indicates corporate governance structures comprising of board of directors and so forth, are elected endogenously by companies as a response to their singular contracting and operating settings. Utilizing the relative benefits and expenses of external director supervision…
Engel, Ellen, Rachel M. Hayes, and Xue Wang. 'The Sarbanes-Oxley Act And Firms' Going-Private Decisions'. Journal of Accounting and Economics 44.1 (2007): 116 -- 145. Print.
This is a journal article that deals specifically with the decision of companies to go private following the passing of SOX. It details why these companies went private, suggesting there was negative effect brought on by the passing of SOX. Specifically, due to less control concerning monitoring. This in part was the main reason why public companies decided to go private, to gain back some of that control.
Gordon, Lawrence A et al. 'The Impact Of The Sarbanes-Oxley Act On The Corporate Disclosures Of Information Security Activities'. Journal of Accounting and Public Policy 25.5 (2006): 503 -- 530. Print.
This article deals with the impact of SOX. Most the impact was said to be negative as it produced less benefits for companies and less control. However there was some positive effect in the sense that there was more disclosure on the part of companies. More disclosure meant higher levels of transparency and more chances for better regulation of businesses. Although it could be perceived as a negative effect by companies, in general it is a positive one brought on by SOX.
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers and staff to meet the contingencies of the proposed systems and controls. The Sarbanes-Oxley section will help the companies on the other hand gain a lot of investment and support from the investors by providing a quality and timely information, with a competitive advantage. (Shanley, 2004)
For the officer and the shareholder and those dealing with the company it ensures that the financially literate directors at the helm and will have internal controls which make the company relatively safe. It is however to be noted that the act is for public companies and many companies have cut issues to escape the provisions of the act. The Auditing firms and the auditing process all have undergone vast changes in the process of…
Anderson, David R. (2006) "Modern Business Statistics"
Bullock, Jane a; Haddow, George. (2006) "Introduction to Homeland Security"
Over the last 13 years, the issue of fraud in publically traded corporations has been increasingly brought to the forefront. This is in response to firms engaging in behavior that is unethical and borderline illegal. The result is that investors demanded drastic action to prevent the situation from becoming worse. In response, Congress enacted the Sarbanes-Oxley Act (i.e. SOX). This required firms to make added disclosures and it closed various loopholes corporations were taking advantage of. To fully understand the impact this is having on the regulatory environment requires focusing on the requirements imposes by SOX. Together, these elements will illustrate how it is designed to prevent fraud within publically traded corporations.
The Provisions of Sarbanes-Oxley
The Sarbanes-Oxley Act of 2002, is dealing with the relationship corporate officers have with the board of directors. In the past, this relationship was used as a way for high level executives to…
DeVay, D. (2006). The Effectiveness of Sarbanes-Oxley. New York, NY: Spinger.
Fox, L. (2003). Enron: The Rise and Fall. Hoboken, NJ: Wiley.
Hanna, J. (2014). The Cost and Benefits of Sarbanes-Oxley. Forbes. Retrieved from: http://www.forbes.com/sites/hbsworkingknowledge/2014/03/10/the-costs-and-benefits - of-sarbanes- oxley/
Green, S. (2004). Manager's Guide to the Sarbanes-Oxley Act. Hoboken, NJ: Wiley.
Sarbanes-Oxley Act of 2002
administration as also a majority of other western administration witnessed the collapse of corporate giants like Enron & Worldcom in the aftermath of noticeably fraudulent executive actions of these companies. This led to shareholders losing confidence and stringent laws was felt necessary in the form of new legislation to avoid repetition of Enron and Worldcom like incidents. The then President George W. Bush entrusted Senator Paul Sarbanes and Congressman Mike Oxley to come up with stringent new laws which would arrest or at least diminish probability of corporate scandals from repeating which came to be known as the Sarbanes-Oxley Act, of 1992. (Holt, 2008)
Key components of SOX Act covered under major Sections of the Act:
Sec 406 of the Act mandates every senior Financial Executive to be signatories of a Code of Ethics. Sec 409 mandates that companies make adequate disclosure regarding material financial alterations…
Coates, John C. (2007) "The Goals and Promise of the Sarbanes-Oxley Act" Journal of Economic Perspectives, vol. 21, no. 1, pp: 91-116.
Holt, Michael F. (2008) "The Sarbanes-Oxyley Act: Costs, Benefits and Business Impact"
Mehera, Madhav. (n. d.) "Sarbanes-Oxley Three Years On" Retrieved 9 May, 2012 from www.wcfcg.net/Sarbanes-Oxley%20Three%20Years%20On.pdf
As pointed out by Bill Travis (2004),
I'm not going to argue that the concept of improving financial reporting and auditing isn't valuable, because it is. The question, however, is at what point in time do the costs and the hours exceed the value? I think if somebody wants to lie, cheat and steal, they'll just find a different way to do it,"
CEOs and CFOs are very much concerned on the Sarbanes-Oxley law because it presents great impact in their business procedures, not to mention the cost that the requirements of the law demands. One for instance is that, because of the law, business partners and prospective investors would naturally insist on assurances such audited and certified financial statements. Another is that the law affects the benefits and executive compensations. But, these effects are not the only concern of CEOs and CFOs about the Sarbanes-Oxley law, but the question…
McGuiness, J. Impact of Sarbanes-Oxley Act on Benefits and Executive Compensation. Journal of Deferred Compensation.
Theodorou, A. (2004). A Political Game With Serious Consequence: Doubts Regarding the Effectiveness of the Sarbanes-Oxley.
The Accountant, i6010, p5.
Enhanced Financial Disclosures:
The 2002 Sarbanes-Oxley Act was enacted as law after several incidents of accounting failures that involved several functions established to safeguard the interests of public investors. In attempts to deal with these issues, the legislation created an absolute revision of the regulatory for professionals in public accounting and auditing though it contained several very controversial provisions (Verschoor, 2012). The revision of the regulatory framework by the act was also geared towards providing guidance for enhanced corporate governance. After its enactment, SOX became the most comprehensive and influential law impacting public corporations and their independent auditors since early 1930s. The legislation mainly focuses on two major segments of investor protection including the responsibility and accountability of Chief Executive Officers and Chief Financial Officers for all financial disclosures and associated controls. The second area is promoting enhanced professionalism and involvement of corporate audit committees.
This act has primarily been…
Salem, G.R. & Franze, L.M. (n.d.). The Whistleblower Provisions of the Sarbanes-Oxley Act of
2002. Retrieved March 23, 2014, from http://www.niri.org/Main-Menu-Category/advocate/regulations/Sarbanes-Oxley/whistleblowerprovisions2002.aspx
"Section 406 -- Code of Ethics for Senior Financial Officers." (n.d.). The Sarbanes-Oxley Act of
2002. Retrieved from The University of Cincinnati College of Law website: http://taft.law.uc.edu/CCL/SOact/sec406.html
Sarbanes-Oxley act on auditing
Changes as a result of the 2002 Sarbanes-Oxley law
In the wake of numerous corporate accounting scandals, several of which involved the famed and trusted accounting firm of Arthur Anderson, the U.S. Congress instituted the 2002 Sarbanes-Oxley Act (SOA). The Act was designed to reduce the likelihood of "cooked books, exorbitant [undisclosed] salaries and loans to CEOs, conflicts of interest by auditors, and hyped-up stock reports by securities analysts at some of America's highest-flying companies and investment firms" (Has Sarbanes-Oxley made a dent in corporate America's armor, 2004, Knowledge @Wharton). One of the reforms of SOA was to demand "significantly higher responsibility from audit committees of publicly traded companies" while amending the Securities Exchange Act of 1934 "to make the audit committee of a reporting company an important participant in the financial reporting process of the company" (Pandit, Subrahmanyam, & Conway 2005). Audit committees have been…
Has Sarbanes-Oxley made a dent in corporate America's armor? (2004).
Knowledge @ Wharton. Retrieved August 26, 2011 at http://knowledge.wharton.upenn.edu/article.cfm?articleid=823
Pandit, Ganesh M. Vijaya Subrahmanyam, & Grace M. Conway. (2005). Audit committee reports before and after Sarbanes-Oxley. CPA Journal. Retrieved August 26, 2011 at http://www.nysscpa.org/cpajournal/2005/1005/essentials/p42.htm
Sarbanes-Oxley Act of 2002 in reducing fraudulent financial reporting
Introduction to Fraudulent Financial eporting
Available research on financial statement fraud relies mostly on anecdotal evidence (for example, Wells, 2001, 2002, 2004a, and 2004b; ezaee, 2003). This evidence offers advice on how mechanisms related to the fraud triangle can be curtailed. It leads to theoretical sense to reduce factors which lead to more instances of fraud. However, deterrence and established deterrence methods in place within organizations have not been examined in proper detail. Neither have the secondary issues which can influence a person's chance of committing financial statement fraud. But there are multiple researches where deterrence models have been tested on other types of fraud e.g. tax fraud, fraudulent reports of environmental violations etc. Generally speaking, a clear consensus regarding the level of effectiveness of prevention mechanisms, such as those stated in GDT, is not present. There are two key parts…
Abbott, L.J., S. Parker, and G.F. Peters. 2004. Audit committee characteristics and restatements. Auditing: A Journal of Practice & Theory 23 (1): 69-88.
AICPA: 2002, Statement on Auditing Standards (SAS) No. 99: Consideration of Fraud in a Financial Statement Audit (American Institute of Certi-ed Public Accountants, Durham).
Albrecht, W. And Albrecht, C. (2004). Fraud examination and prevention. South- Western, Mason Ohio.
Albrecht, W.S. And M.B. Romney. 1986. Red flagging management fraud: A validation. Advances in Accounting 3: 323-333.
Sarbanes-Oxley Act on a Medium Sized Company
The following paper begins with a discussion of the benefits of going public. The paper then gives a comparison between a public and private company. It focuses on the fund raising procedures of the private companies as well. The paper also discusses the ratios that are evaluated at the time of and IPO and determines the impact of these ratios on the decisions of the company. The paper then discusses the positive and negative impacts of the Sarbanes-Oxley act and finishes with a recommendation about whether to continue as a private company or go public.
Benefits of Going Public
Going public refers to an initial public offering of a private company. An initial public offering is the first time a company offers its shares to public. Different companies have different reasons for going public. One of the reasons is to obtain capital. Privately,…
Jong, A., Huijgen, C., Marra, T., & Roosenboom, P. (2012). Why Do Firms Go Public? The Role of the Product Market. Journal Of Business Finance & Accounting, 39(1-2), 165 -- 192.
PricewaterhouseCoopers,. (2010). Roadmap for an IPO A guide to going public (pp. 4-13). London: PricewaterhouseCoopers.
Primack, S. (2012). The Financial Impact of the Sarbanes-Oxley Act on Small vs. Large U.S. Public Companies (1st ed., pp. 1-5). Berkeley: University of California. Retrieved from http://live.econ.berkeley.edu/sites/default/files/Primack.pdf
Troy, L. (2008). Almanac of business and industrial financial ratios (1st ed., pp. 9-22). Chicago, IL: CCH.
One critical area is with respect to board oversight. The Act mandated that the boards contain enough external members in order to function with relative independence from management. Board members must be sufficiently competent to detect fraud. This means that some board members should have functional competence in the areas in which the company operates while other board members should have significant financial expertise to detect suspicious transactions. Improving governance at the director level is critical to improving governance overall (Guerra, 2004)
Another area where improvement is needed is with respect to auditors and analysts. Public accounting firms had taken the attitude that auditing was an ancillary function to their consulting businesses, creating a conflict of interest. This conflict is to be eliminated, where firms are not to engage in consulting business with the companies that they audit. Analysts must have firewalls between them and the companies they analyze --…
Tesco’s Fraud in the Accounting Information System
The Accounting Information Systems (AIS) plays a central part in the business computing structure of any organization. AIS deals with the classification, collection, storage, monitoring, and conversion of the company’s data into information utilized for internal control and reporting (Smith, 2016). Once an organization adopts an Accounting Information System, they can keep accurate records, and manage the assets of the organizations properly. The management utilizes AIS to guarantee that there are suitable access and separation of duty controls. With such restrictions, the administration can hold the employees responsible for their interaction with the system. This paper delves into how the components and functions of Tesco’s accounting information system contributed to the 2014 fraud scandal.
Tesco’s Fraud Scandal
Tesco is popular grocery retailer with its head office in Welwyn Garden City, Hertfordshire, U.K. (Colson, 2017). Globally, it is ranked at position nine regarding revenues…
positives and negatives of Sarbanes-Oxley Act and how it changed corporate financial reporting. How well has Sarbanes-Oxley worked?
In the late 1990s, the stock market was continually rising and corporate profits were accelerating. This was based upon the belief that the new economy was transforming the way everyone lived their lives. At the heart of these views, was the fact that advancements in technology, deregulation and a new found sense of entrepreneurship were changing the way businesses are interacting with customers. In some cases, this occurred through the sale of a host of products and services online (i.e. The e-commerce approach). While at other times, firms engaged in practices to take advantage of deregulation in key markets. In some cases, this involved companies focusing on expanding their operations to address these transformations. (Said, 2011)
Then, after technology spending began to slow in the early 2000s, is when the dot com…
Do the Benefits of Sarbanes-Oxley Justify the Costs? (2012). Rand. Retrieved from: http://www.rand.org/pubs/research_briefs/RB9295/index1.html
Sarbanes-Oxley Socking Private Companies. (2005). Biz Journals. Retrieved from: http://www.bizjournals.com/sacramento/stories/2005/06/20/smallb3.html?page=all
Said, C. (2011). From Y2K Fizzle. SF Gate. Retrieved from: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2000/12/24/BU179712.DTL&ao=all
The auditing process was also significantly affected by the passage of Sarbanes-Oxley. Indeed, the most significant impacts of the legislation are faced by auditors. Auditors are forbidden to have conflicts of interest, such as consulting agreements with the firms they serve as auditors. This has increased the independence of the audit function. Auditors are now held directly responsible for the statements. This has shaped some changes in the auditing profession, in that auditing firms now no longer have other relationships with the firms they audit, and the trend in revenues for auditing firms is towards in increase in auditing revenues and a decrease in consulting revenues.
SOX also addressed the issue of board oversight. ith the increased attention on financial reporting, most boards now have at least one member with strong financial experience to help analyze the financial statements. This again places increased pressure on those preparing the financial statements.…
Everyman Business. SOX Compliance. Retrieved March 20, 2011 from website: http://www.everymanbusiness.com/sox-certification/sox-compliance-2/
Wikipedia. Sarbanes-Oxley Act. Retrieved March 20, 2011 from website: http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act#Benefits_of_Sarbanes_Oxley_Act_on_a_long_term_basis
The Impact of Sarbanes-Oxley Act. April 25th, 2005. Retrieved, March 20, 2011 from website: http://www.gpo.gov/fdsys/pkg/CHRG-109hhrg23133/pdf/CHRG-109hhrg23133.pdf
Pattern of inductive reasoning is as follows: Theory ?Tentative Hypothesis ?Pattern ?Observation. While inductive approach is concerned with the open-ended explanatory, deductive reasoning chooses a narrow perspective by testing or confirming the hypothesis. (Trochim, & Donnelly 2007). Typically, inductive reasoning chooses qualitative approach to test the hypothesis. However, the deductive approach employs quantitative method to test hypothesis before arriving at confirmation. In qualitative research, it is not necessary to generate hypothesis to begin research, however quantitative studies make use of hypothesis to begin research. One of the advantages of deductive approach is that the researcher is able to test the hypothesis by using data. The limitation of quantitative approach is that the hypothesis could only be tested when there is enough data. (Ali, & Birley, 1998).
In accounting research, testing the hypothesis with the use of the statistical analysis is the common method to arrive at confirmation. The validity of…
Ahmed, A.S. McAnally, M.L. Rasmussen, S. et al. (2009). How costly is the Sarbanes-Oxley Act? Evidence on the effects of the Act on corporate profitability. Journal of Corporate Finance 16: 352 -- 369
Ali, H & Birley, S. (1998). Integrating deductive and Inductive Approaches in a Study of New Ventures and Customer Perceived Risk. Imperial College of Science, Technology and Management,
Boot, A.W.A. Gopalan, R. & Thakor, A.V. (2004). Go Public or Stay private: A Theory of Enterpreneurial Choice: CEPR Discussion Papers 4219, C.E.P.R. Discussion Papers.
Boot, A.W.A. Gopalan, R. & Thakor, A.V. (2008). Market Liquidity, Investor Participation, and Managerial Autonomy: Why Do Firms Go Private?, The Journal of Finance. LXIII (4): 2013: 2059
S. through even 2009. The exponential growth of Indian outsourcing companies who have expertise in Business Process Management (BPM) have correspondingly seen an increase in their business, as many smaller American publicly-held companies do not have the people or the expertise to get their processes, systems, it plans and accounting and reporting functions in compliance to the SOX standard in any meaningful period of time (adtke, et.al.) as a result many accounting professionals also must manage outsourcing contracts with companies who specialize in BPM and SOX process-redefinition. Finally there is also more concentration on oversight at the corporate level, with companies including Boeing having a Chief Compliance Officer who reports directly to the CEO to ensure GC Initiatives gain the necessary resources to be effective. Accounting and auditing will continue to be significantly influenced by SOX for the foreseeable future as the need for compliance grows.
The accounting and…
Ronald Jelinek, Kate Jelinek. "Auditors gone wild: The "other" problem in public accounting " Business Horizons 51.3 (2008): 223. ABI/INFORM Global. ProQuest. 14 Mar. 2009
Jeffrey E. Michelman, Bobby E. Waldrup. "Improving Internal Control Over Financial Reporting" the CPA Journal 78.4 (2008): 30-34. ABI/INFORM Global. ProQuest. 13 Mar. 2009
Robin R. Radtke.. "Role Morality in the Accounting Profession - How do we Compare to Physicians and Attorneys? " Journal of Business Ethics 79.3 (2008): 279-297. ABI/INFORM Global. ProQuest. 13 Mar. 2009
Sandra Waller Shelton, O. Ray Whittington. "The influence of the auditor's report on investors' evaluations after the Sarbanes-Oxley Act. " Managerial Auditing Journal 23.2 (2008): 142-160. ABI/INFORM Global. ProQuest 13 Mar. 2009
Engle (2009) also notes that the costs of compliance in both monetary and human terms are greatly reduced by a willingness to embrace the regulation as a tool rather than shunning it as a "necessary evil." Though stating the obvious, he says what many in the business world simply couldn't bring themselves to hear just over a year ago, namely that "smart managers approach compliance before there is a problem that impacts the company and its stakeholders" (Engle 2009, p. 18). The issues at Bear Stearns and Lehman Brothers could have been prevented with regulation, but those at Enron and WorldCom were exacerbated by outright fraud, and the regulations provided by the Sarbanes-Oxley Act would have prevented such egregious mistreatment and mis-management of the company and its shareholders.
Strangely, the detection and prevention of fraud is not a benefit often perceived in the regulations of the Sarbanes-Oxley Act by…
Chang, H.; Choy, H.; Cooper, W.; Parker, B. & Ruefli, T. (2009). "Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes-Oxley Act." Socio-economic planning sciences 43(4), pp. 221-8.
Engle, P. (2009). "Making compliance effective." Industrial engineer 41(8), p. 8.
FEI. (2008). "FEI Survey: Average 2007 SOX Compliance Cost $1.7 Million." Financial Executives International. Accessed 25 September 2009. http://fei.mediaroom.com/index.php?s=43&item=204
5 million annually to comply with the law. The increases in spending (resulting in less spending in marketing and administration) for many energy companies will be in "security, grid reliability, and wholesale market operations" (Gartner, 2004).
The cost of providing the Securities and Exchange Commission with "two declarations" regarding internal financial controls certainly is significant; and those dollars take away revenue from other departments of utility companies, unless, a utility expects to just absorb additional costs. PriceaterhouseCoopers' (www.pwc.com p. 4) "Sustainable From the Start" document points to a company's duty under SOX to one, "state its responsibility for creating and maintaining adequate internal controls over financial reporting"; and two, issue an independent report as to whether the auditor agrees with management's conclusion (www.pwc.com p. 9) or not. Moreover, PC asserts that for some companies SOX has "tipped the emphasis the wrong way and forced companies to get stuck in process…
Cote, Bryan. (2008). Failed Audit? Preventing Failure -- while streamlining the audit
Process. Sarbanes-Oxley Compliance Journal. Retrieved May 8, 2009, from http://www.s-ox.com/dsp_getFeaturesDetails.cfm?CID=2022 .
Gartner. (2004). Industry Research: Energy Utility Companies Weight in on Sarbanes-
Oxley and Disaster Recovery. Retrieved May 6, 2009, from http://www.sox.weblog.gartner.com.
Standard to most businesses is the idea that it is management's only responsibility in an organization to generate profits -- the best possible fiscal return for stakeholders. This template argues that the fiscal responsibility of the business is paramount, but that managers may not be the right level to handle a morally suspect global project. Additionally, focusing too farm on moral issues and too little on profit (Savage and McEltory, 2005). The entire purpose of doing business is to allow the organization to grow and evolve. Business would not flourish if there were no profitable advantages for both workers and the organization. A contrary view is called the "socio-economic" view of foreign trade. This view argues that organizations, who wish to compete and make a profit, must be amenable to societal changes. Simply looking at profit does not tell the entire story and is a rather myopic view…
Commission Adopts Rules Strengthening Auditor Independence. (September 2003). U.S. Securities and Exchange Commission. Retrieved from: http://www.sec.gov / news/press/2003-9.htm
Corporate Conduct. (2002, July 31). Retrieved from The New York Times: http://query.nytimes.com/gst/fullpage.html?res=9C01E0D91E38F932A05754C0A9649C8B63
Bryce, Robert, (2002), Pipe Dreams: Greed, Ego, and the Death of Enron, Washington, DC: Public Affairs.
Bumiller, E. (2002, July 31). Corporate Conduct: The President. Retrieved July 2010, from The New York Times: http://www.nytimes.com/2002/07/31/business/corporate-conduct-the-president-bush-signs-bill-aimed-at-fraud-in-corporations.htmlPages / sec50.aspx
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…
Sarbanes-Oxley legislation's effect on IT Companies
Public Company Accounting Reform and Investor Protection Act of 2002 (the Sarbanes-Oxley Act) was an attempt by regulators to increase transparency and accountability in business processes and corporate accounting to restore confidence in public markets. (Logan and Mogull, 2003) One optimistic article published in the wake of the 2002 Sarbanes-Oxley legislation stated that "new personal responsibility" for companies' financial accountability could benefit chief executive and financial officers by increasing trust and thus increasing revenue for corporate America in the long-term. (PR Newswire, 2002) But James O'Brien notes in his 2002 textbook on Management Information Systems, that the act was passed in the wake of the Enron scandal, not to help corporate America, but to protect the consumer.
Although spawned by an oil scandal, it affects all companies. The act was not specifically passed to regulate oil, IT or any specific companies in any specific…
Logan, Debra and Mogull, Rich. (October 2003) "Sarbanes-Oxley: Technology." Retrieved on October 7, 2004 at http://www3.gartner.com/DisplayDocument-doc_cd=117875
PR Newswire (2002) "Sarbanes-Oxley legislation can boot efficiency" Retrieved on October 7, 2004 at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-30-2004/0002240594&EDATE=
O'Brien, James. (2004) Management information Systems: Managing Information Technology. Sixth Edition. New York: McGraw Hill.
Zrismick, Brian, et al. (2002) "Sarbanes-Oxley Affecting ERO/Financial Applications." Retrieved on October 7, 2004 at http://www3.gartner.com/DisplayDocument-doc_cd=117415
Sarbanes-Oxley Legislation: Pros and Cons
According to some analysts, despite its costs, Sarbanes-Oxley legislation had some potential benefits for organizations: the additional documentation has amounted to a kind of enforced 'best practices' analysis. It "allows for complete documentation of processes identifying any gaps in a desired 'Best Practices' state" and offers an "opportunity to rethink old processes -- you may be using 10-year-old processes that don't offer your department maximum effectiveness in today's tax environment. Consider what can be done a better way? What have you been hoping to change, but haven't yet found the opportunity or reason to act?" (Guelker 2004). The 21st century frenzy of mergers and acquisitions which can make such best practices opaque to management in a highly bureaucratic organization make this even more pertinent -- leaders must have a clear idea of how organizations are managed to both prevent fraud allegations under SOX…
Beasley, M. & Hermanson, D. (2004).Going beyond Sarbanes-Oxley compliance: Five keys to creating value. CPA Journal. Retrieved from:
Coenen, T. (2010). Fraud files: How well does Sarbanes-Oxley reduce fraud risk? Daily
Finance. Retrieved from: http://www.dailyfinance.com/2010/07/16/fraud-files-how-well-does-sarbanes-oxley-reduce-fraud-risk/
As one commentator has stated, the presence of two different sets of accounting rules, each plagued by imprecision and subject to multiple interpretations, gives corporations "two different bites at the apple." (6) What used to be seen as an economically advantageous distinction between tax and financial accounting may now be considered a "credibility gap." (7) (Whitaker, 2005, p. 680)
There have of coarse also been historical defenders of the book-tax gap who are concerned that if tax liability is to closely linked to reported financial statements, the corporate tax lobby might attempt to attack and dissolve the Financial Accounting Standards Board, which has been funded to a large degree and voluntarily by accounting firms and the business community. Sarbanes-Oxley attempted to eradicate this problem by developing a new funding structure, which replaced the old system by replacing these voluntary funds with mandatory fees gleaned from securities issuers.
As the staff…
Alexander, N., & Brody, L. (2003). Split-Dollar Redux: CPAs May Find the Benefits a Thing of the Past. Journal of Accountancy, 195(6), 95.
Carpenter, T.D., Fennema, M., Fretwell, P.Z., & Hillison, W. (2004). A Changing Corporate Culture: How Companies Are Adjusting to Sarbanes-Oxley. Journal of Accountancy, 197(3), 57.
Chambers, V., & Crowley, P. (2003). Capitalism and Accounting Reform. SAM Advanced Management Journal, 68(3), 44.
Dennis, a. (2004). Small Firms: Think Big! More Work at Large Firms Means More Opportunity for Smaller Ones. Journal of Accountancy, 197(6), 22.
Unifying all compliance strategies throughout a business and placing internal auditors in the position of managing variations in processes and reporting results has emerged as a critical success factor for GC strategies (Michelman, Waldrup, 2008). The businesses that are minimizing the disruption of SOX-related it, process and strategy changes have successfully implemented internal auditing oversight programs. This aspect of internal controls is struggling in some businesses as resistance to change and the oversight function is seen as a threat to political power (Michelman, Waldrup, 2008). CEOs and the senior management team of an organization however must be in compliance to Section 302, Corporate esponsibility for Financial eports, which states they have audited and personally verify the accuracy of their financial statements (Bedard, Graham, Hoitash, Hoitash, 2007). Section 404 holds a company officer liable for the accuracy and veracity of the data on financial statement (Hemani, 2005).
SOX initially led…
Linda Devonish-Mills. (2007). Updates on XBRL and SOX. Strategic Finance, 88(8), 14-16.
Bashir Hemani. (2005). What is Sarbanes-Oxley, and What Does it Have to Do with Supply Chain Management? Journal of Validation Technology, 11(2), 134-143.
Bedard, J., Graham, L., Hoitash, R., & Hoitash, U.. (2007). Sarbanes-Oxley Section 404 and Internal Controls. The CPA Journal, 77(10), 34-37.
Michelman, J., & Waldrup, B.. (2008). Improving Internal Control Over Financial Reporting. The CPA Journal, 78(4), 30-34.
To improve security procedures, annual compliance training for all employees is mandated at Humana.
Humana has also been praised for its positive organizational attitude in adapting to HIPAA and SOX, although corporate officials acknowledged that some aspects of meeting regulatory goals were challenging. Still, compliance with both legislative acts has been portrayed by top management as 'good hygiene' in terms of patient security and accounting practices. There was none of the excessive hostility or secrecy sometimes seen when adapting to new regulatory challenges at other corporations (Fitzgerald, 2006, p.50). This attitude made all employees more willing to take such steps as memorizing rather than writing down passwords, which may have proved an irritant had not the organization stressed its necessity.
In fact, there is more overlap between Sarbanes-Oxley than might be immediately obvious, making Humana's experiences with both HIPAA and SOX equally illustrative. SOX was originally passed to limit off-book…
Beal, Barney. (2003, November 21). Seven steps to Sarbanes-Oxley compliance.
SearchCIO. Tech Target. Retrieved April 22, 2010 at tp://searchcio.techtarget.com/news/article/0,289142,sid182_gci938537,00.html
Fitzgerald, M. (2006, June). The art of compliance. CIO Insight. 69, 44-53.
Hurley, Edward. (2003, September 25). Security and Sarbanes-Oxley.
Sarbanes -- Oxley Act of 2002 (SOX)
In the year 2002, the U.S. Congress passed the Sarbanes-Oxley Act (www.sarbanesoxley.com), which, together with later regulations adopted in the two successive years following its enactment, impacted auditors', company manager' and directors' responsibilities with regard to their companies' financial reporting. Furthermore, the PCAOB (Public Companies Accounting Oversight Board) was established as part of this Act; the board is in charge of overseeing publicly-traded companies' audit of financial statements, and establishing American auditing standards. The Act's key purpose was increasing the confidence of shareholders in companies' financial reports. For achieving this goal, the Board was set up, for supervising issues of corporate governance and external auditing, which can impact financial report reliability. Moreover, the Act increased company managers' responsibility to produce dependable financial reports, while also specifying constraints for external auditors' activities, for enhancing auditors' independence from client companies (Shakespeare, 2008).
Benefits for Businesses…
Kimmel, P.D., Weygandt, J.J. & Kieso, D.E. (2011). Financial Accounting, 6th Edition. Wiley.
Quigley, J.T. (July 22, 2004). Sarbanes-Oxley Implementation in Restoring Public Confidence, Washington, D.C, House Committee on Financial Services, Deloitte, 2004.
Shakespeare, C. (2008). "Sarbanes -- Oxley Act of 2002 Five Years On: What Have We Learned?." Journal of Business & Technology Law: 333.
Wagner, S. & Dittmar, L. (April 2006). The Unexpected benefits of Sarbanes-Oxley. Harvard Business Review. Retrieved from https://hbr.org/2006/04/the-unexpected-benefits-of-sarbanes-oxley on 25 January 2016
SOX Impact on Corporate Financial Reporting
The Sarbanes-Oxley Act of 2002 (SOX) led to widespread changes in how governance, risk, compliance, financial reporting and decision-making are managed in publically-held coproratio9ns today. Experts in the field of governance and compliance have concluded that the SOX Act immediately redefined the scope of financial reporting and risk definition (Hagerty, 2006). This was especially prevalent in the bond markets, where forcing greater disclosure of financial performance and material events including Section 404 of the Act (Sarbanes-Oxley Act, 2002) led to more oversight of just how bond debt instruments were structured and implemented over time (oubakri, Ghouma, 2008). The net effect of the SOX Act continues to be seen today with positive and negatives changes to corporate financing taking place, and they are analyzed in the following section.
Positive and Negative Changes to Corporate Financing from the SOX Act
The SOX Act was deliberately written…
Boubakri, N., & Ghouma, H. (2008). Managerial opportunism, cost of debt financing and regulation changes: Evidence from the sarbanes-oxley act adoption. Rochester: Social Science Research Network.
Engel, E.R. Hayes, and X. Wang. 2004. The Sarbanes-Oxley act and firms' going private decisions. Working paper. University of Chicago. May 2004.
Hagerty. AMR Research. Boston, MA. Thursday May 18, 2006.
Sarbanes-Oxley Act (2002) U.S. Senators Sarbanes and Oxley. Passed in 2002 by both U.S. House of Representatives and U.S. Senate.
Events that led to implementation of various regulatory measures
The implementation of the 1984 Sentencing Reform Act called for the establishment of Federal Sentencing Guidelines for Organizations (FSGO). The United States Sentencing Commission decided to come up with these guidelines targeted at individuals and firms. The key aim was crime prevention and decreasing disparities in sentencing. (Mercer, 2003). At first, in the year 1991, the idea of organizational punishment mitigation was introduced, for cooperation and effective adherence to the program.
The 2002 federal regulation, SOX (Sarbanes-Oxley Act), put extensive financial and auditing related regulations in place for publicly-traded organizations. The chief goal was regulation of corporate practices like financial reporting at such corporations.
The Consumer Financial Protection Bureau (CFPB), instituted as part of the 2010 Consumer Protection Act and the Dodd-Frank Wall Street Reform, is responsible for the oversight of federal financial regulations expressly protecting consumers (i.e., individuals who store the money they own…
Sarbanes-Oxley Act of 2002 is will probably be known as one of the most significant change to federal securities laws in the United States since the New Deal. The act was passed after a series of corporate financial scandals made the national news, which included a slew of companies such as Enron, Arthur Andersen, and orldCom. The most notable provisions of the act include such items as both criminal and civil penalties for securities violations, a push for auditor independence from the corporation, requirements that guarantee certification of internal audit work by external auditors, and significant calls for increased disclosure regarding executive compensation, instances of insider trading as well expanding types of information that must appear on financial statements.
Even though the act may lessen the burden of the consequences of unethical acts that the public has to bear, all publicly traded companies now have to deal with the formidable…
Open Pro. (2011). OPENPRO AND SARBANES-OXLEY COMPLIANCE. Retrieved from Open Pro: http://openpro.com/products_features_sox.html
Pele-Sol. (2011). What is Business Process Automation. Retrieved from Pele-Sol Engineered: http://www.pele-sol.com/pele_factsheet_new.pdf
Solu Soft. (2009, January 13). Business Process Management. Retrieved from Solu Soft: http://solu-soft.com/CompliancewithSarbanes.pdf
Dodd-Frank and Sarbanes-Oxley Acts are important legislations in the corporate world because of their link to public and privately held companies. Sarbanes-Oxley Act was enacted to enhance transparency and accountability in publicly traded companies. On the contrary, Dodd-Frank Act was enacted to disentangle the confused web of financial service company valuations. Actually, these valuations are usually hidden by complex and unclear financial instruments. The introduction of Sarbanes-Oxley Act was fueled by recent incidents of accounting frauds by top executives of major corporations such as Enron. In contrast, Dodd-Frank Act was enacted as a response to the tendency by banks, insurance companies, hedge funds, rating agencies, and accounting companies to serve up harmful offer of ruined assets and liabilities brought by systemic non-disclosure (Anand, 2011, p.1). While these regulations have some similarities and differences, they have a strong relationship with the financial markets.
elationship between the Acts and Financial Markets:
Anand, S. (2011). Essentials of the Dodd-Frank Act. Hoboken, NJ: John Wiley & Sons, Inc.
Brink, A.G., Lowe, J. & Victoravich, L. (2013, August). The Effect of Evidence Strength and Internal Rewards on Intentions to Report Fraud in the Dodd-Frank Regulatory Environment. Auditing: A Journal of Practice & Theory, 32(3), 87-104.
Casey, K.L. (2011, January 23). Speech by SEC Commissioner: "The Regulatory Implementation
and Implications of Dodd-Frank." Retrieved from U.S. Securities and Exchange Commission website: https://www.sec.gov/news/speech/2011/spch012311klc.htm
Prior to the corporate financial scandal, WorldCom was one of the largest long distance telephone companies (euters, 2003). Initially headquartered in Mississippi it later moved to Virginia. The company grew fast by acquiring other companies such as MCI Communications in 1998 and UUNET technology in 1996. Other companies acquired included, Metromedia in 1992, esurgens Communications Group in 1993. In the course of this acquisition spree, WorldCom undertook two complex takeovers. The first was the 1998 acquisition of CompuServe from H& Block where it retained the network division, sold off the online service to American Online (AOL) and the second, the acquisition of Digex in 2001, and disposed of all Digex assets to Allegiance Telecom (Kaplan & Kiron, 2004). With these acquisitions, it gained a favorable reputation in the market as a company with a solid foundation.
Facts of the WorldCom Case
The WorldCom fraud case is one of the…
Kaplan, R.S., & Kiron, D. (2004). Accounting Fraud at WorldCom. HBS Premier Case Collection .
Reuters. (2003, April 14). WorldCom to emerge from collapse. Retrieved from www.cnn.com: http://edition.cnn.com/2003/Business/04/14/worldcom/
Ryerson, F. (2009). Improper Capitalization and The Management of Earnings. Las Vegas: Macon State College.
The Securities and Exchange Commission, 02 Civ. 3288 (United States District Court For the Southern District of New York June 26, 2002).
Improvements in Integrity, Financial Accountability, Ethical Conduct and Corporate Responsibilities under the Sarbanes-Oxley Act of 2002
e passed Sarbanes-Oxley in the wake of the Enron scandal to try to root out financial and accounting irregularities. How could similar irregularities occur at Lehman Brothers? History has a way of constantly repeating itself. -- Joseph Grant 2010
The high-profile corporate shenanigans by Enron and Lehman Brothers have made it clear that tough legislation was needed to compel Americans businesses to clean up their financial acts. Indeed, in response to Enron's late 2001 bankruptcy, Congress enacted the Sarbanes-Oxley Act of 2002 but the Lehman Brothers' bankruptcy in late 2008 made it clear that there was still a problem in some sectors of American business. This paper provides a review of the relevant literature to determine how the integrity of corporate finance, ethics, and other responsibilities have improved, what the corporate finance industry culture…
Bierstaker, James, Marshall, Kenneth K. And Greenwald, Jonathan. (2010, December).
"Strengthen Your Core: Are You Getting the Most from Your Compliance, Operations,
Risk, and Enterprise Support Functions?" Strategic Finance 92(6): 35-39.
Carter, Charles C. (2011, May 1). "Freefall: America, Free Markets, and the Sinking of the World Economy." Journal of Real Estate Literature 9(2): 492-499.
190). The Act also helped to create a "too-big-to-fail" mindset (Walter, 2004) that would have profound implications during the economic downturn of 2008 and beyond.
Why did you include this piece of legislation in your list? The Act is described by Sammin (2004) as being "the biggest revision in financial services law since the Great Depression" (p. 653).
iegle-Neal Interstate Banking and Branching Efficiency Act of 1994
What were the problems/conditions giving rise to the legislation? apid consolidations among the nation's banks were creating the potential for diverting needed banking resources from communities (ose, 1997).
What were the major provisions of the Act? The iegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (hereinafter "the Act") contained the following major provisions:
A. Bank holding companies that are adequately capitalized and managed can acquire a bank anywhere in the United States one year after this law is enacted.…
Alexander, K., Dhumale, R. & Eatwell, J. (2006). Global governance of financial systems: The international regulation of systemic risk. New York: Oxford University Press.
Coustan, H., Leinicke, L.M., Rexroad, W.M. & Ostrosky, J.A. (2004). Sarbanes-Oxley: What it means to the marketplace; from support to apprehension, accounting professionals express their thoughts. Journal of Accountancy, 197(2), 43-44.
Feinberg, R.M. & Reynolds, K.M. (2010). An examination of entry and competitive performance in rural banking markets. Southern Economic Journal, 76(3), 624-625.
Gup, B.E. (2003). The future of banking. Westport, CT: Quorum Books.
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…
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
Company members falsifying, altering, destroying or otherwise tempering with organizational documents risk punishments between fines up to 20 years imprisonment
Organizational staff members notifying their superiors or the legal authorities of fraudulent operations are protected under the whistleblower protection provision. People who retaliate against the individuals who offer condemning information of the company are punished with anything between a fine up to ten years imprisonment (Prahalad, 2008).
As an addition to these provisions, it is automatically implied that the auditor will keep an objective opinion and will perform his tasks within the highest standards of professional quality. Yet, since it is possible for the auditor to have shares in the respective organization, have a child employed there or other such situations, he is asked to identify the existence of any conflicts of interest and withdraw from the audit process.
At a first level, the Sarbanes-Oxley act was expected…
Donaldson, W.H., 2005, Testimony Concerning the Impact of the Sarbanes-Oxley Act, Securities and Exchange Commission, http://www.sec.gov /news/testimony/ts042105whd.htm last accessed on May 20, 2010
Fass, a., 2003, One Year Later, the Impact of Sarbanes-Oxley, Forbes, http://www.forbes.com/2003/07/22/cz_af_0722sarbanes.html last accessed on May 20, 2010
Prahalad, a., 2008, Key Provisions of the Sarbanes-Oxley Act, Articles Base, http://www.articlesbase.com/online-business-articles/key-provisions-of-the-sarbanes-oxley-act-509714.html last accessed on May 20, 2010
2006, the Sarbanes-Oxley Act, Sox Law, http://www.soxlaw.com / last accessed on May 20, 2010
Ethics and Accounting - Financial Decision-Making
Ethics in Accounting and Financial Decision Making
The article Ethical guidance and constraints under the Sarbanes-Oxley Act of 2002 by .M. Orin (2008), espouses the belief that the Sarbanes-Oxley Act did not go far enough in its desire to stop unethical financial practices by businesses. The article addresses what the Act actually does, which is to help companies practice more due diligence and lessen the chances of getting involved in unethical financial practices. The Sarbanes-Oxley Act involves important legal issues. The due diligence is one of those issues, but another is the need for accountants and lawyers to report the corporations they work with for wrongdoing if they see or suspect a serious financial issue (Coffee, 2002). This has been a concern for some because it technically compromises the attorney-client privilege. This was necessary, though, in the face of all of the corporate scandals…
Coffee, J.C. Jr. (2002, September). Leading issues under Sarbanes-Oxley, Part 1, New York Law Journal: 5.
Koehn, J.L. & Del Vecchio, S.C. (2004, February). Ripple effects of the Sarbanes-Oxley Act. The CPA Journal: 36-40.
Orin, R.M. (2008). Ethical guidance and constraints under the Sarbanes-Oxley Act of 2002. Journal of Accounting Auditing and Finance: 141-171.
Sarbanes-Oxley Act The objective of this study is to read the guide to the Sarbanes-Oxley Act and to: (1) Evaluate the effectiveness of regulations such as Sarbanes-Oxley Act over…Read Full Paper ❯
Sarbanes-Oxley Act The Impact Upon the Accounting Profession What it does The Effect of Sarbanes-Oxley on the Accounting Profession New Rules, New Practices The past few years have remarkably…Read Full Paper ❯
Sarbanes-Oxley Act -- it's a good thing n the wake of the horrible corporate scandals of recent years, including Enron and Arthur Anderson, it became readily apparent that some…Read Full Paper ❯
Sarbanes-Oxley Act hile most Americans know the names Enron and orldcom, fewer know the term Sarbanes-Oxley Act; however, despite the alarming impact of the two business disasters, the potential…Read Full Paper ❯
Sarbanes-Oxley Act (SOA) was put into law in 2002 following the revelations that Enron (and Enron's accountancy Arthur Anderson), orldCom, and other corporations were using blatantly corrupt practices in…Read Full Paper ❯
Sarbanes-Oxley Act Evaluating the effectiveness of the Sarbanes-Oxley Act The Public Company Accounting eform (PCA) and Investor Protection Act (IPA) was established in mid-2002 by the congress with the…Read Full Paper ❯
Literature on the Sarbanes-Oxley Act of 2002 The field of specialized literary reviews on the Sarbanes-Oxley Act is a widely spread one presenting numerous issues form various standpoints. Reviewers'…Read Full Paper ❯
The integrity of the financial sector of these organizations controlled by state agencies and related services, would improve. The provisions offered by the act would serve as models based…Read Full Paper ❯
The investors got intoxicated by fraud happened to them because of greedy people. Thousands of employees left as the stock market went to the peak but most of them…Read Full Paper ❯
Sarbanes-Oxley Act I agree with the points presented in the Sarbanes-Oxley and Public Company Accounting Oversight Board (PCAOB) essay. Investors and portfolio managers are typically outsiders when it comes…Read Full Paper ❯
IntroductionFrom the onset, it would be prudent to note that the Sarbanes-Oxley Act remains a rather instrumental law in efforts to reign in corporate fraud and further enhance reliability…Read Full Paper ❯
Accounting - Corporate Finance
The Sarbanes-Oxley Act: Compliance Hazards and Ethical DilemmasThe critical components of compliance with the Sarbanes-Oxley Act include the acknowledgement of responsibility by CEOs and CFOs for all financial reports,…Read Full Paper ❯
Ethics / Morality
The Sarbanes Oxley Act - Ethical Dilemmas in the Banking IndustryThe Sarbanes Oxley Act poses various dilemmas in its execution in the financial industry. Particularly in its implementation in…Read Full Paper ❯
1. If jail time is off the table for executives, that would be an odd choice. Sarbanes Oxley creates disincentives for esecutives to commit fraud, such as in Enron.…Read Full Paper ❯
Quality and Reliability in Financial Reporting Publicly-traded companies have an obligation to provide accurate and reliable financial statements to current and potential investors. Investors and others users of financial…Read Full Paper ❯
Education - Computers
Sarbanes-Oxley Act on Internet security systems As well as impacting accounting, the Sarbanes-Oxley Act also had a significant impact upon IT security: "Each organization that is affected by the…Read Full Paper ❯
The question is then, how far legislation should go to avoid future scandals such as Enron and other major companies. It appears that the current constraints, especially in terms…Read Full Paper ❯
The statute of limitation for the discovery of fraud is increased to two years from discovery date and five years following the act. Criminal penalties for securities fraud was…Read Full Paper ❯
If this policy was in place at the time of the Enron scandal, Anderson may not have had any incentive to lie on behalf of Enron. Another extremely important…Read Full Paper ❯
Sarbanes-Oxley Act was enacted to facilitate in guaranteeing the correctness of financial reporting by the public listed companies. In the stir of millions of dollars of investor's money going…Read Full Paper ❯
Sarbanes-Oxley. The political pressure of the past several years following the dot.com bubble and the collapse of several major companies created a need for new securities legislation, which culminated…Read Full Paper ❯
The implementation of the Sarbanes-Oxley Act section 404 as federal law was a necessary step in order to regain public trust in the financial controls and reporting of companies.…Read Full Paper ❯
Sarbanes-Oxley Act, also known as the SOX, was passed in the year 2002 in the United States of America to not only strengthen and fortify the Corporate Governance of…Read Full Paper ❯
SOX The Sarbanes-Oxley Act (SOX) was passed in 2002 as a response to a wave of corporate accounting scandals. To measure the effectiveness of SOX over the past ten…Read Full Paper ❯
However, because of the costliness of this requirement, many believe it is especially unfair to small businesses who are already struggling to be competitive in an increasingly hypercompetitive, globalized…Read Full Paper ❯
Sarbanes-Oxley Act is a mandatory act passed in 2002. The legislation introduced significant modifications to the regulation of corporate governance and financial practice. The act was named after Senator…Read Full Paper ❯
In the company it has ushered in a better accounting and the management with upgrades in technology and competence, there will be a requirement for training and upgrading managers…Read Full Paper ❯
Sarbanes-Oxley Over the last 13 years, the issue of fraud in publically traded corporations has been increasingly brought to the forefront. This is in response to firms engaging in…Read Full Paper ❯
Sarbanes-Oxley Act of 2002 administration as also a majority of other western administration witnessed the collapse of corporate giants like Enron & Worldcom in the aftermath of noticeably fraudulent…Read Full Paper ❯
As pointed out by Bill Travis (2004), I'm not going to argue that the concept of improving financial reporting and auditing isn't valuable, because it is. The question, however,…Read Full Paper ❯
Enhanced Financial Disclosures: The 2002 Sarbanes-Oxley Act was enacted as law after several incidents of accounting failures that involved several functions established to safeguard the interests of public investors.…Read Full Paper ❯
Sarbanes-Oxley act on auditing Changes as a result of the 2002 Sarbanes-Oxley law In the wake of numerous corporate accounting scandals, several of which involved the famed and trusted…Read Full Paper ❯
Sarbanes-Oxley Act of 2002 in reducing fraudulent financial reporting Introduction to Fraudulent Financial eporting Available research on financial statement fraud relies mostly on anecdotal evidence (for example, Wells, 2001,…Read Full Paper ❯
Sarbanes-Oxley Act on a Medium Sized Company The following paper begins with a discussion of the benefits of going public. The paper then gives a comparison between a public…Read Full Paper ❯
One critical area is with respect to board oversight. The Act mandated that the boards contain enough external members in order to function with relative independence from management. Board…Read Full Paper ❯
Business - Ethics
Tesco’s Fraud in the Accounting Information System The Accounting Information Systems (AIS) plays a central part in the business computing structure of any organization. AIS deals with the classification,…Read Full Paper ❯
positives and negatives of Sarbanes-Oxley Act and how it changed corporate financial reporting. How well has Sarbanes-Oxley worked? In the late 1990s, the stock market was continually rising and…Read Full Paper ❯
The auditing process was also significantly affected by the passage of Sarbanes-Oxley. Indeed, the most significant impacts of the legislation are faced by auditors. Auditors are forbidden to have…Read Full Paper ❯
Pattern of inductive reasoning is as follows: Theory ?Tentative Hypothesis ?Pattern ?Observation. While inductive approach is concerned with the open-ended explanatory, deductive reasoning chooses a narrow perspective by testing…Read Full Paper ❯
S. through even 2009. The exponential growth of Indian outsourcing companies who have expertise in Business Process Management (BPM) have correspondingly seen an increase in their business, as many…Read Full Paper ❯
2009). Engle (2009) also notes that the costs of compliance in both monetary and human terms are greatly reduced by a willingness to embrace the regulation as a tool…Read Full Paper ❯
5 million annually to comply with the law. The increases in spending (resulting in less spending in marketing and administration) for many energy companies will be in "security, grid…Read Full Paper ❯
Sarabanes-Oxley Act Standard to most businesses is the idea that it is management's only responsibility in an organization to generate profits -- the best possible fiscal return for stakeholders.…Read Full Paper ❯
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…Read Full Paper ❯
Sarbanes-Oxley legislation's effect on IT Companies Public Company Accounting Reform and Investor Protection Act of 2002 (the Sarbanes-Oxley Act) was an attempt by regulators to increase transparency and accountability…Read Full Paper ❯
Sarbanes-Oxley Legislation: Pros and Cons Positive effects According to some analysts, despite its costs, Sarbanes-Oxley legislation had some potential benefits for organizations: the additional documentation has amounted to a…Read Full Paper ❯
As one commentator has stated, the presence of two different sets of accounting rules, each plagued by imprecision and subject to multiple interpretations, gives corporations "two different bites at…Read Full Paper ❯
Unifying all compliance strategies throughout a business and placing internal auditors in the position of managing variations in processes and reporting results has emerged as a critical success factor…Read Full Paper ❯
To improve security procedures, annual compliance training for all employees is mandated at Humana. Humana has also been praised for its positive organizational attitude in adapting to HIPAA and…Read Full Paper ❯
Sarbanes -- Oxley Act of 2002 (SOX) In the year 2002, the U.S. Congress passed the Sarbanes-Oxley Act (www.sarbanesoxley.com), which, together with later regulations adopted in the two successive…Read Full Paper ❯
SOX Impact on Corporate Financial Reporting The Sarbanes-Oxley Act of 2002 (SOX) led to widespread changes in how governance, risk, compliance, financial reporting and decision-making are managed in publically-held…Read Full Paper ❯
Regulatory Measures Events that led to implementation of various regulatory measures The implementation of the 1984 Sentencing Reform Act called for the establishment of Federal Sentencing Guidelines for Organizations…Read Full Paper ❯
Sarbanes-Oxley Act of 2002 is will probably be known as one of the most significant change to federal securities laws in the United States since the New Deal. The…Read Full Paper ❯
Dodd-Frank and Sarbanes-Oxley Acts are important legislations in the corporate world because of their link to public and privately held companies. Sarbanes-Oxley Act was enacted to enhance transparency and…Read Full Paper ❯
WorldCom Prior to the corporate financial scandal, WorldCom was one of the largest long distance telephone companies (euters, 2003). Initially headquartered in Mississippi it later moved to Virginia. The…Read Full Paper ❯
Improvements in Integrity, Financial Accountability, Ethical Conduct and Corporate Responsibilities under the Sarbanes-Oxley Act of 2002 e passed Sarbanes-Oxley in the wake of the Enron scandal to try to…Read Full Paper ❯
190). The Act also helped to create a "too-big-to-fail" mindset (Walter, 2004) that would have profound implications during the economic downturn of 2008 and beyond. 6. Why did you…Read Full Paper ❯
Business - Law
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…Read Full Paper ❯
6. Company members falsifying, altering, destroying or otherwise tempering with organizational documents risk punishments between fines up to 20 years imprisonment 7. Organizational staff members notifying their superiors or…Read Full Paper ❯
Ethics and Accounting - Financial Decision-Making Ethics in Accounting and Financial Decision Making The article Ethical guidance and constraints under the Sarbanes-Oxley Act of 2002 by .M. Orin (2008),…Read Full Paper ❯