The Importance Of Sarbanes Oxley Act - 1713 Words

MEMO To: Professor of ACG 1001 Writing Project From: Calvin Robinson CC: Date: June 13, 2016 Re: The Importance of Sarbanes-Oxley Act After several scandals that involved such major corporations as WorldCom, Enron and Arthur Anderson. President Bush signed the Sarbanes-Oxley Act of 2002 on July 30, 2002 which created after Senator Paul Sarbanes and Representative Michael Oxley. The act was created to regulate financial practices and corporate governance. It consists of 11 different sections or titles. It is aimed at protecting investors by providing accuracy and reliability of corporate disclosures and to help restore confidence within the investors. â€Å" Sarbanes-Oxley developed the Public Company Accounting Oversight Board, a private, nonprofit corporation, to ensure that financial statements are audited according to independent standards†.(Fass 2003) The first main aspect of federal legislation was the Securities Act of 1933, which was derived from the Market crash of 1929. In order to protect a company or a business it relies that each quarterly report financial issues has to be authorized and confirmed by the executive officer or chief financial officer. Therefore, companies are required to have an internal auditor that is certified by an external auditor. The Sarbanes-Oxley Act or SOX affects not only the financial corporations, but also IT departments that are in charge of storing electronic records for companies. The act states that the records should not beShow MoreRelatedSarbanes Oxley Act Of 2002 Essay1343 Words   |  6 PagesSarbanes-Oxley Act of 2002 The financial crisis of the early 2000s left many investors and stockholders nervous about the accuracy of financial statements issued by public companies. The financial crisis resulted after many previously successful companies suddenly tanked due to restatement of their financials. These companies include Enron, Tyco, Sunbeam, Rite-Aid, Xerox and WorldCom amongst others (Kieso, 2014, p. 17). How could many previously successful companies suddenly go belly-up? The evidenceRead MoreLjb Company Case1592 Words   |  7 PagesExternal Consultation to LJB Company EXTERNAL CONSULTATION TO LJB COMPANY Abstract A paper presented on the case study 2 review of LJB Company. The paper will address growing issues of Sarbanes-Oxley compliance, and business ethics in regards to Corporate Social Responsibility (CSR) and adherence to current regulatory federal mandates. Paper presents tools for consideration for tomorrow’s leaders and gives a general overview of internal control strategiesRead MoreThe Collapse Of Enron Corporation1547 Words   |  7 PagesAccounting Principles (GAAP) introduce the fall of the Enron Corporation due to the off-balance sheet arrangements, the role of mark to market and lastly, the manipulation of derivatives. When the United States Congress passed the Foreign Corrupt Practices Act (FCPA) on 1977, to not just prevent but to motorize financial irregularities in the market, and many violations in the accounting system. Enron was the most famous Corporation in American history to collapse. A major corporation created by acquisitionRead MoreSarbanes Oxley Act Of 2002 Essay1380 Words   |  6 Pagesfraud, Congress passed the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act is an accounting and business related law that was put into place to help boost confidence in financial accounting and financial markets (US Sarbanes Oxley Act). Some of its key provisions are that it requires the CEO and CFO to personally sign off on all financial statements, increases penalties for those who violate the act, and it protects whistleblowers (SOX 2002). Clearly, Sarbanes-Oxley can improve ethics in financialRead MoreFree Enterprise Fund Vs. Public Company Accounting Oversight Board700 Words   |  3 Pagescourt case in which the Petitioner accounting firm which was a non profit organization wanted to sue the PCAOB because they believe that the President had not control over the members of the board and threaten the separation of power law. The Sarbanes-Oxley Act, also known as SOX was to put in place to protect investors from fraud in accounting activi ties in corporations. The courts ruled that the separation of powers was not broken because The President of the United States can remove member of theRead MoreThe Sarbanes Oxley Act : A Direct Effect On Corporate Governance955 Words   |  4 PagesThe Sarbanes-Oxley Act has a direct effect on corporate governance, and it is the strengthening of audit committees at public companies. This audit committee members oversees the company’s the management accounting decisions and gain new responsibilities such as approving numerous audit and non-audit services, selecting and overseeing external auditors, and handling complaints regarding the management’s accounting practices (Blokhin, 2015). There has been increased attention to corporate governanceRead MoreThe Impact Of Sarbanes Oxley Act On Public Companies And The Market1336 Words   |  6 Pages The affects of the Sarbanes-Oxley Act on Public Companies and the Market Shareen Sidhu University of Maryland University College The Affects of the Sarbanes-Oxley Act on Public Companies and the Market The Sarbanes-Oxley Act of 2002 was implemented and designed to â€Å"protect the interests of the investing public† and the â€Å"mission is to set and enforce practice standards for a new class of firms registered to audit publicly held companies† (Verschoor, 2012). During the early 2000 s, the worldRead MoreQuestions On The Sarbanes Oxley Act1172 Words   |  5 PagesASSIGNMENT #2 Throughout our academic studies, we have been taught what the Sarbanes-Oxley Act is and what it represents. However, professors have left behind the topic of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and have focused mainly on teaching about the Sarbanes-Oxley Act. In this paper I will further explain both of these fundamental terms, some of the major provisions of Sarbanes-Oxley Act and Dodd-Frank, and the pros and cons for some of the provisions targetedRead MoreSarbanes Oxley Act Of 20021635 Words   |  7 Pagesregulation named Sarbanes-Oxley Act of 2002 , also called â€Å"Public Company Accounting Reform and investor Protection Act† The main purpose of the act is to protect shareholders and general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures. (Mike Oxley 2002). Sarbanes-Oxley Act of 2002 is deemed to be one of the most virtual governance reforms and cor porate disclosure in the United States history. This act made it possibleRead MoreImportance of Ethics in Accounting1065 Words   |  5 PagesRunning head: IMPORTANCE OF ETHICS IN ACCOUNTING Importance of Ethics in Accounting Everest University Importance of Ethics in Accounting Accounting fraud is common but is not as trivial as the common cold; a typical organization loses annual revenues of nearly 5 percent to fraud. In addition, almost one-quarter of reported fraud is exceeding $1 million dollars. The accounting industry is constantly growing and changing. Consequently, difficult decisions have to be made every day.