Sarbanes Oxley Act Table of Contents Executive Summary 3 Introduction 4 Sarbanes Oxley Act 2002: The Burden it places on companies 5 Cost of Compliance 5 Cost of Finance to U.S Companies 5 Fees and Audit 6 Reduced Competition 7 Conclusion 8 References 9 Executive Summary The Sarbanes Oxley Act‚ named after its two main sponsors‚ Senator Paul Sarbanes and Congressman Mike Oxley is a legislation that must be complied by all business in the U.S. The act consists of 11 titles and
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government/regulators have enforced stringent regulations and inspection actions to be taken in case of misconduct‚ more noticeably after unethical scandals in financial reporting by Enron‚ WorldCom‚ Tyco
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in unethical behaviors is because of heavy pressures on company managers to meet or beat earnings. The most recent example of this would be WorldCom. At WorldCom there were incredibly high pressures from upper management to meet profit goals. With this pressure many managers hide costs and inflated revenues over a several year period. The scheme helped WorldCom make additional acquisitions‚ support its $30 billion debt‚ as well as allow executives to cash in on their stock options. The final reason
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An oligopoly describes a market situation in which there are limited or few sellers. Each seller knows that the other seller or sellers will react to its changes in prices and also quantities. This can cause a type of chain reaction in a market situation. In the world market there are oligopolies in steel production‚ automobiles‚ semi-conductor manufacturing‚ cigarettes‚ cereals‚ and also in telecommunications. Often times oligopolistic industries supply a similar or identical product. These
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accounting issues resulting in an improvement in financial reporting. Page 4 However‚ he goes on to say he has doubts about whether we have experienced such a drop in actual fraud in financial reporting. Although there may not be such Scandals as WorldCom or Enron‚ he doesn’t believe that a reduction in fraud will occur just because of Sarbanes-Oxley or other
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for reviewing and approving the use of resources and caring for shareholder interests. (45-46) One of the most well known examples of a board of directors who did not meet it’s responsibility is WorldCom. The board of directors did not control and monitor the CEO who led the destruction of WorldCom and was convicted of accounting fraud and sentenced to 25 years in prison. The CEO ran the company the way he wanted to with his goal of achieving financial growth through acquisitions without having
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2000’s for their misleading accounting methods‚ leading investors to believe the company was making billions; in which the government step-in‚ and created the Sarbanes-Oxley Act (SOX) of 2002. In early 2000’s‚ numerous Fortune 500 companies‚ Enron‚ WorldCom‚ Arthur Anderson and Adelphia and others‚ were alleged practicing complex accounting methods to cover their huge debt‚ while claiming they were making billions of dollars (Ferrell‚ O. C.‚ Hirt‚ G. A.‚ & Ferrell‚ L. 2005). However‚ the accounting
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Sarbanes-Oxley Act Brandie Cortinas ENGL 145(D-21) 5-12-14 Ms. Vivian Abstract The act enacted in response to financial problems to protect the public from accounting errors and fraud. The act does not specify how a business should store their records; rather‚ it defines which records are to be stored and for how long they’re going to be stored. The act affects the financial corporations and the IT department. All business records must be saved for more than five
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the financial system. The July 2002 enactment of the Sarbanes Oxley Act‚ co-authored by U.S. Sen. Paul Sarbanes of Maryland and U.S. Rep. Michael Oxley of Ohio‚ followed a series of large public company failures that included Enron‚ Tyco and WorldCom. Sarbanes-Oxley addressed investor confidence and fraud through reform of the public company reporting standards. However‚ much damage in the market occurred with the collapse of several major companies between 2002 and 2004. (smallbusiness.chron
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overvalued at the point of acquisition and take a huge written-off afterwards and thus companies can reduce the systematic drag on earnings by adopting different depreciation and amortization methods. In precedent high-profile scandals‚ such as Enron‚ WorldCom and Cisco‚ great losses were suffered by the investor‚ employees and the whole society‚ which draw great attention of the regulatory authorities and the public to avoid such tragedy to happen again. To increase the earning quality in acquisition
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