downfall? The evidence that Andersen ’s corporate culture contributed to its downfall is supported by the fact that Andersen took up lucrative management consultancy contracts from Enron. In addition‚ when Enron cam under investigation from the Federal authorities‚ Arthur Andersen shredded documents related to Enron. This incident shows that Andersen had a culture that contributed to its downfall. It actively contributed to obstruction of justice. 3. How can the provisions of the Sarbanes-Oxley
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important to the accounting profession. (15 points) Sarbanes-Oxley Act was created in order to ensure that controls were implemented and monitored by the regulating authority. Congress wanted to make sure that there was a specific standard and guideline for companies to follow in order to prevent fraud at such a large scale. When followed correctly there are controls set in place that are internal which are governed by the managers and checked upon by the Federal regulatory authorities. This act was
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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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These are procedures the independent auditor follows when evaluating financial statements such testing the issuer’s internal control‚ and materiality. At the end of the audit‚ the CPA firm provides a detailed audit report on their findings of the issuing company to the audit committee. It is the responsibility of the audit committee to ensure the funding of the independent
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process the correct controls must be put in place. In addition to these self implemented tools‚ companies are under increased government regulation to validate their internal processes and controls. All of this activity needs a point person. That point person is the internal auditor. The purpose of this brief is to define the role of the internal auditor. Why the role is necessary and to recommend a qualified candidate for the role. To understand how the addition of an internal auditor will help
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and complete financial information and how accounting professionals have benefitted from its use. Provide support for your response. The Sarbanes-Oxley Act of 2002 (often shortened to SOX) is legislation enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. The act is administered by the Securities and Exchange Commission (SEC)‚ which sets deadlines for compliance
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high profile corporations such as Enron‚ WorldCom and Tyco‚ a much required overhaul regarding financial statements and regulatory standards laid the foundation for the Sarbanes-Oxley Act. This act is making the accounting world more accessible to others for auditors to come in and help in checking the books. It will hold the executives and directors accountable for the internal controls of the company especially with the threat of imprisonment if the internal controls are not maintained. The act
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was passed in response to corporate accounting scandals by Enron‚ WorldCom‚ and others? a. Sarbanes-Oxley Act. b. 1933 Securities Act. c. 1934 Securities Exchange Act. d. Regulation Fair Disclosure. 3. Internal controls represent plans to: a. Safeguard the assets b. Continually improve the efficiency of operation c. Improve accuracy and reliability of information d. Both a and c 4. Which of the following is an example of preventive control of cash? a. Match the balance of cash in the bank account
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Regulatory Environment Sarbanes-Oxley Act was passed in 2002 by former president George Bush. Essentially to combat the Enron crisis. The Sox Act basically has regulatory control and creates an enviroment that is looking out for the public. Ideally this regulatory environment protects the public from fraud within corporations. Understanding‚ that while having this regulatory control at times the Sox requirements need to be tweaked or amended. Not only now but in the future as well. The main aspects
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1. The management has the final responsibility for the integrity of internal controls. The client prepares the financial statements and the management makes certain claims or assertions about these numbers. The auditor’s validate the management’s assertions by identifying audit objectives‚ which are the auditor’s version of assertions on the financial statements. The auditors are hired by the audit committee‚ which is comprised of key members with financial expertise and not the management. The audit
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