investor money illegally is a very commonly seen mechanism. On a daily basis news relating to such fraudulent activities is noticed. The main sources through which such frauds are committed are Management Overriding Controls and Tampering with Financial Statements. Some scams such as Enron of USA and Satyam scam of India have come in the picture and shattered investor confidence. Although Corporate Scams are connected to corporate houses‚ it is generally seen that all government scams somehow or the
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with Sarbanes Oxley Act (SOX) of 2002 when the large companies such as Enron‚ WorldCom‚ Adelphia‚ and many others collapsed between 2001 and 2002‚ and Congress passed SOX also known as the White-Collar Criminal Penalty Enhancement Act of 2002 (Jennings‚ 2006). To minimize the fraudulent activities done by especially the educated ones such as top executives of the company‚ Security Exchange Commission (SEC)
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legislation since the Securities Act and Securities Exchange in the 1930s. It is mostly understood as a process that implemented major reforms on the particular schedule specified by Congress. Many large companies such as Arthur Anderson‚ Enron‚ and WorldCom were affected. The Enron and WorldCom disasters offered the motivation from the community outrage that required many of the on hand reform proposals into effect for publicly traded companies. Many of these existed for years lacking adequate political authority
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of the publisher. For permission to use material from this text or product‚ submit a request online at http://www.thomsonrights.com. Art Director: Linda Helcher Internal Designers: C Miller Design Cover Designer: Stratton Design Cover Image: Purestock Media Bakery Printer: Edwards Brothers Ann Arbor‚ MI Library of Congress Control Number: 2007923689 For more information about our products‚
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AIS – Final Study Chapter Highlights Chapter 1 – ACCOUNTING SYSTEM INSIGHTS 1. Enterprise system – A system that supports business activities throughout the enterprise‚ including inputs‚ processing‚ and outputs 2. Integrated enterprise system – Shares data across functional areas within the enterprise 3. Business processes – Related activities performed by an enterprise to create value by transforming input into output 4. Value chain – An organizing framework for business processes
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them are based on these general themes. The term ‘Corporate Fraud’ usually includes activities such as corruption‚ misuse of accounts‚ payroll fraud‚ embezzlement‚ theft‚ conspiracy‚ money laundering‚ extortion and bribery. Corporate fraud can be internal or external but must be related to the organizations anyway. Throughout the whole report we will discuss the scope of the report‚ objective of the report‚ limitations of the report. We will discuss the nature of the corporate fraud and the role of
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of its AIS to prevent the fraud As alluded to by the Security Director ’s Report (2011)‚ it seems internal auditor were not thoroughly reconciling or analyzing statements relative to payments made to contractors and money transfers. Or still‚ they probably did not even have information about Citigroup’s corporate accounts. If did so‚ Gary Foster would not have had such honeymoon. Did the internal auditors overlook him because he was midlevel accountant at Citigroup and so was not that big a fish
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than did the audits of the 19th century. True False 2. The American Institute of Certified Public Accountants issues CPA certificates and permits CPAs to practice. True False 3. A company is either audited by the GAO or internal auditors‚ but not both. True False 4. The SEC does not pass on the merits of the securities that are registered with the agency. True False 5. The American Institute of Certified Public Accountants has the primary authority
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to exercise with their independent and resulted in facing a claim‚ some more severe cases has resulted in curtailment of their activities‚ suspended by companies‚ and even close down due to consequential loss of reputation. Let’s take the famous Enron case as an example. Arthur Andersen‚ which used to be one of five largest auditor firms in the world‚ failed to perform a proper auditing work under the threat of its client‚ which lead to the impairment of independence and caused a serious audit failure
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“Accounting did not cause the recent corporate scandals‚ unreliable financial statements were the results of management decisions‚ fraudulent or otherwise”. (Lin & Wu‚ 2006‚ para. 5) Waste Management‚ HealthSouth‚ Enron‚ Satyam and Madoff are just a few names that come to my mind when I think of fraudulent accounting. Disguised loans‚ inflated income‚ improper accounting and misstated earnings‚ different words all describing the same thing‚ FRAUD. Fraud affects the company‚ the consumers
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