Case study for seminar work -Pacific Sunwear of California‚ Inc. 1. Discuss the different types of control that SOX implies for PacSun; what action‚ results‚ personnel and cultural controls are used? Action control: Section 302 of SOX required both the company’s CEO and CFO to personally certify the “appropriateness of the financial statements and disclosures contained in the periodic report”. PacSun top management required their subordinates to share the certification responsibility. Through
Premium Auditing Audit Internal audit
ability of their leader to fix everything later on. This case is known as one of the biggest accounting frauds in the corporate history of the U.S. This paper will analyze who was affected by this fraud‚ the motives behind it and what systems of control failed to prevent it. The major groups that were directly affected are investors‚ employees‚ and suppliers. Here we should make the distinction between different types of investors. There are two major types of investors: insiders and outside investors
Premium Audit Enron Accounting scandals
When does employee fraud occur? It is commonly accepted that the presence of the three elements of the “Fraud Triangle” increases the risk of employee fraud: Motivation: The employee is somehow motivated to commit a fraud. Economic factors such as personal financial distress‚ substance abuse‚ gambling‚ overspending‚ or other similar addictive behaviors may provide motivation. The current national economic recession may serve to increase the incidence of such financial motivations. Opportunity:
Premium Fraud Ponzi scheme Credit card
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
Premium Internal control Finance Public Company Accounting Oversight Board
1. Introduction Internal control is a very important internal governance mechanism for the modern enterprises‚ which is responsible to correct the error and prevent fraud‚ and ensure the healthy development of the company. The bankruptcy of Enron occurred in 2001 has made the U.S. and global focus on internal control. So the internal control evolving from a spontaneous governance mechanism to a system construction is a regulatory power driven by government. As important measures of the government
Premium Management Internal control Auditing
Case Study：Parmalat：Europe’s Enron 1. Review the facts in the case‚ especially the charges in the complaint‚ and evaluate the auditors’ compliance with GAAS. Do you think the auditor did all they could to detect the fraud? Evaluate whether auditors exercised due care and the level of professional skepticism to be expected in an audit the size of Parmalat. After review the material‚ it is apparently the auditors did not do all they could to detect the fraud Parmalat and its management conducted
Premium Audit Auditing Corporate governance
Satyam Fraud: A case of India’s Enron 1. Describe the governance structure at Satyam. What was the “tone-at-the-top” at Satyam during the fraud period? • • • • • • • 2. In terms of the confirmation of cash balances‚ what deficiencies can you identify in terms of the procedures followed in the Satyam engagement? • • • • 3. Ramalinga Raju was the Chairman of the Board His brother‚ Rama Raju‚ was the Managing Director and CEO They both had direct operational control over all aspects of the company’s
Premium Auditing Audit Internal control
Corporate Tax Returns . . . . . . . . . . . . . . . 11 11. Corporate Fraud Accountability . . . . . . . . . . . 11 Chapter 3 . . . . . . . . . . . . . . . . . . . . . . 13 An Accountant’s View . . . . . . . . . . . . . . 13 Internal Control Scorecard . . . . . . . . . . . . 17
Premium Internal control Auditing Fraud
outcome of the aftermath of the Enron‚ Tyco‚ and WorldCom scandals. The Sarbanes-Oxley Act (SOX)‚ was to prevent corporations and their executives from willingly misleading the public of their financial health. The SOX Act was intended to protect investors by increasing the accuracy and reliability of corporate disclosures. SOX created new standards for corporate accountability. The SOX Act also changes the way how executives interact with each other and with internal auditors. This allows for a legal
Premium Enron Audit Auditing
Is earnings management good or bad? Who (or which part of corporate governance mechanisms) is responsible to constrain earnings management? To what extent can the auditor constrain earnings management? Propose some methods for the auditors to detect and constrain earnings management. Does market react to firm’s earnings management behavior? In order to discuss earnings management and what its affects are on business and whether or not it’s a good thing‚ one must first understand what earnings management
Premium Internal control Auditing Audit