issuers are obligated to distribute data in their yearly reports regarding the sufficiency and extent of the internal control formation and processes for fiscal reporting. Also‚ this report should evaluate the efficiency of practices and internal controls. Conversely‚ in the same report‚ the corporation should corroborate and give an account on the evaluation on the efficiency of the internal control formation and processes for fiscal reporting (The Sarbanes-Oxley Act 2002‚ n.d). Sarbanes-Oxley Act Section
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Sarbanes- Oxley act is also known as SOX act which provides strict norms for corporations for disclosing the financial details to protect the accounting fraud. The SOX act which enacted because of the scandals which occur on the early 2000 which are Enron‚ Tycon and WorldCom. Sarbanes-Oxley act which named after Senator paul Sarbanes and representative Micheal Oxley who were the main architects of this act. The act which is titled into eleven titles and also it is divided into sections and the most
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involving Enron and WorldCom. The act was created in order to combat corporate accounting fraud and enhance the quality of corporate financial disclosures. To accomplish this‚ the act created the "Public Company Accounting Oversight Board"‚ or PCAOB to oversee audits and compliance. History of the Act The Sarbanes-Oxley act arose as a result of several corporate accounting scandals that became public in late 2001 and early 2002. These scandals involved many publicly traded companies such as Enron‚ which
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comply with the joint code of professional conduct conventional by the Society of Certified Practicing Accountants (CPA) Australia and the Institute of Chartered Accountants Australia (ICAA). The collapse of the insurance giant HIH in Australia and Enron in United States has been mechanism for considerable changes in financial report auditing. Many of these changes focus on the presence and extent of the auditor independence. A major issue of the Auditor independence is the treats to independence are
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conditions and regulatory initiatives have resulted in a variety of codes and regulations to meet the needs of local capital markets[i]. For instance‚ in the United States‚ several major corporate and accounting scandals such as those perpetrated by Enron‚ WorldCom‚ Tyco International‚ and Adelphia communications resulted in the enactment of laws and rules to restore and maintain confidence in the financial markets. Other nations experienced similar situations and enacted rules and regulations to promote
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Insull”‚ Who Made America?. March 25‚ 2011‚ http://www.pbs.org/wgbh/theymadeamerica/whomade/insull_hi.html. Traylor O. (1935) “The Insull Trial”‚ Journal of Criminal Law and Criminology‚ 782-787. Turner‚ L. (2009) Accounting Information Systems: Controls and Processes. Hoboken‚ NJ: John Wiley & Sons‚ Inc. Wasik‚ J. (2006) “Mane Who Set the Pattern for Bringing Power to Our Cities”‚ The Washington Times‚ B08.
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profits were invented by corporate schemers. Companies such as Sunbeam‚ Waste Management‚ Rite-Aid and some others were some of the earlier cases before getting to the larger scandals involving Enron‚ WorldCom‚ Adelphia‚ Qwest and Global Crossing. The Sox Act has required companies to establish internal controls along with procedures for financial reporting (Koestenbaum‚ Keys‚ & Weirich‚ 2009). The act forced those in management
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Sarbanes-Oxley Act Dariya Gogueva Kaplan University Cost/Benefit Analysis of the Sarbanes-Oxley Act US Congress passed the Sarbanes – Oxley Act (SOX) in 2002 in response to massive corporate and accounting scandals in companies such as Enron‚ WorldCom‚ and Tyco. The purpose of SOX was to improve the corporate behavior in the US‚ in order to prevent fraud and to gain investors’ trust and confidence in the market by implementing rules and restrictions. Since SOX Act has been effective there
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into motion the deadlines for compliance with it. These Senators were Paul Sarbanes and Michael Oxley. The Sarbanes-Oxley Act was brought into force in 2002 to help regulate financial practices of corporations. This was mostly due to the actions of Enron and WorldCom scandals. The management of these corporations was not being truthful with the public about the handling of the finances of the companies while taking large bonuses for themselves. The use of the Sarbanes-Oxley Act‚ no matter how large
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management and public accounting firms. It is named after sponsors U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. 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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