Sarbanes-Oxley Act Article Analysis This article discussed the reasons why the Sarbanes-Oxley Act was enacted. The corporate fraud and dishonesty the was present in companies such as Enron Corp‚ WorldCom‚ and Adelphia Communications‚ Inc. required the Federal government to enact legislation that would protect the free enterprise system within the United States. The Sarbanes-Oxley Act established the Public Company Accounting Oversight Board (PCAOB) that is responsible for regulating accounting
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Bibliography: Internet * PANCHOO‚ O.‚ 2008 * MARTIN‚ P.‚ 2005. Ebbers found guilty in WorldCom fraud: a case study of US Corporate Criminality [online]. Available from: http://www.wsws.org/articles/2005/mar2005/ebb-m18.shtml [Accessed 2 November 2010]. * MILLER‚ M.‚ 2008. Business Ethics (Importance of Business Ethics) [online]. USA. Available
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References: Bohlman‚ H. M. (2005). The Legal Ethical and International Environment of Business. Thomson South Western . Scharff‚ M. (2005). WorldCom: A Failure of Moral and Ethical Values. Journal of Applied Management and Entrepreneurship .
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investors were enticed into forking up large amounts of money into these corporations. The effect of these actions will cause investors to invest in the company that ere not as profitable as the reports states. Some of these corporations include WorldCom‚ Enron‚ and Tyco. Once the investor realized that these businesses were not profitable and the numbers were drastically inflated‚ it was too late and millions were lost in the process. This ultimately led to government introducing the Sarbanes-Oxley
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very important. If the whole society and the whole business world can have the good consciousness and ethical environment‚ the legislation may not so important. Q.4. In each case discussed at some length in this chapter – Enron‚ Arthur Andersen‚ WorldCom‚ and Bernie Madoff – the problems were known to whistle-blowers. Should those whistle-blowers each have made more effort to be heard? How? In each of the case‚ there are whistle-blowers. For example‚ Carl Bass was a whistle-blower to Arthur Andersen
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Although the dividend yield concept is similar‚ the capital gains concept of a market driving a share price upwards is much more complex and difficult to ‘drive’ from a leadership perspective than what most family based businesses focus on. In conclusion‚ one of the primary drivers of share prices is a company which promises and delivers profitable growth in both the top-line and bottom-line of the income statement. A family owned and managed business is as interested in sustainability and control
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In the case of WorldCom‚ a national company that began in 1983 and would provide long-distance telephone services‚ it is hard to determine where the problem begins. The case‚ as explained in the book‚ has never really found the core of the problem. We are told that financial reports were falsely created and improper accounting practices were found‚ but who is to blame? The textbook tells us that several of the former top financial executives pleaded guilty to securities fraud‚ however they defended
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and employees of such powerhouse companies like Enron and WorldCom that went bankrupt without ever publicizing financial hard times. How could this ever happen? According to Horngren‚ Harrison Jr.‚ and Oliver (2010)‚ both Enron and WorldCom overstated profits‚ but WorldCom took it a step further by reporting expenses as assets (p. 380). Almost overnight‚ lives were ruined and the business community shaken; “the Enron and WorldCom accounting scandals rocked the United States” (Horngren‚ Harrison
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financial fraud problems within corporations. One was bill (S. 2673) brought by Senator Sarbanes and the other bill (H. R. 3763) brought by Representative Oxley. Both bills where passed separately one by the house and the other by the senate but after WorldCom revealed to the public that they had overstated its earnings "by more than $72 billion dollars during the past five quarters." (en.wikipedia.org) the house and the senate decided to form a conference committee to bring both bills together to form
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assets. In addition‚ to these unethical behavior there are other unethical practices like insider trading‚ bribery‚ securities fraud‚ and manipulation of the financial markets. In the late 1990’s and early 2000’s both publicly traded companies‚ WorldCom and Enron added weighted truth to the credibility of accounting and business ethics. Both Companies were involved in scandals that engaged in misrepresentation in financial statements and fraud. Enron was one of the world’s leading American energy
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