Accountant’s criminal liability According to federal laws accountants can be criminally liable for violating certain federal and state securities laws and for other law violations. The Enron scandal‚ revealed in October 2001 led to the Sarbanes-Oxley Act of 2002 with new rules on auditor independence‚ Enron was attributed as the biggest audit failure at that time; the creation of the board of public company accounting oversight‚ corporate governance and certification requirements‚ whistleblower
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Waste Management‚ Rite-Aid and some others even before you got to the gargantuan cases in the early 2000s involving Enron‚ WorldCom‚ Adelphia‚ Qwest and Global Crossing‚” (Sweeney‚ 2012‚ para. 13). These scandals mainly involved the reporting of inflated and/or inaccurate financial records‚ misusing or misdirecting funds‚ or hiding debt to make companies appear more profitable. Enron was by far the largest‚ and still best known‚ of the early accounting scandals. This probably has a lot to do with
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THE ETHICS OF CREATIVE ACCOUNTING Introduction: In the accounting world‚ the general rule is that accounts should give a true and fair view. Under local and international law‚ a professionally experienced accountant has a responsibility to meet the terms‚ a corporation has a legal responsibility to meet the terms‚ and auditors have a legal responsibility to give some species of judgment on compliance. Although the function of accounting principles and other rules‚ creative accounting has constantly
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whether they report it or not‚ they are damned as the book stated because once authorities know‚ the company might suffer public humiliation and if they don’t report it‚ the company eventually will collapse due to everything blowing up just like Enron. Describe the kinds of corporate wrongdoing a senior executive might discover that would not be covered by Sarbanes-Oxley The Act provides protection only for those matters that involve security fraud so whistleblowing of other kinds of wrongdoing
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There are many factors that inspire organizations to assure and push ethical policies. In the last seven years‚ the world has witnessed stunning financial collapse in many companies that were ranked among the most admired in America. Companies like Enron and WorldCom‚ left an impact the way ethics is valued and viewed among companies. What went wrong? The question that arises is what form of ethics or education training did the involved auditors‚ accountants and managers receive? Ethics training
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Abstract: Sarbanes-Oxley (SOX) act‚ was enacted in 2002‚ in the wake of large accounting scandals ENRON and WORLDCOM .Especially for SMEs (small to mid-sized enterprises) that can benefit from implementing the control objectives‚ for governance‚ compliance and improved security. SOX compliance did not gave detailed requirements for IT compliance‚ therefore many auditors adopted COBIT and COBIT guidelines to comply with SOX. This research discusses the latest sox developments in the SME‚ key findings
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publicly traded big business’s in the 1990s. During this time‚ multiple large publicly-traded businesses increased their stock prices by “publishing false or deceptive financial statements” (Lasher‚ 2008‚ p. 187). The most publicly charged company was Enron‚ which was then followed by Xerox‚ WorldCom and Global Crossing. This resulted in millions of dollars of stock market value disappearing in what seemed to be overnight. It is in response to these events that Congress drafted and passed the Sarbanes-Oxley
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Ethics/Sarbanes Oxley Act of 2002 Article Summary The Sarbanes-Oxley Act‚ which was enacted July 30‚ 2002 in response to the Enron and WorldCom scandals‚ gives extended powers to the Securities and Exchange Commission. It was enacted to provide investors with accurate and timely disclosure of financial and other important data of public companies and to ensure that audits of this financial data are performed according to accepted standards and by independent accounting firms. The Compliance
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else with your investment. But there is an answer to help protect companies and shareholder‚ and it comes in the form of a regulatory organization that was put in place in 2002. That was put in place as a direct response to the corporate scandals of Enron and other scandals that followed‚ and was also put in place to help restore confidence in the financial market. SOX-Applies only to US companies on the US exchange‚ and is an Act put in place in 2002 to mandate all publicly traded corporations
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I can’t help but listen to their dispute seeing as it was made to protect businesses from having misleading information on their accounts. It’s a funny dispute as one of Sarbanes key objectives was to restore investors’ confidence after the whole Enron scandal and others which took place. This fraudulent actions were the catalysts for this act to be enforced. Now I will try and state the negatives experienced through the initiation of the Sarbanes Oxley
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