The extent and expanse of the finance and accounting branches have been expanding at a considerable step which has also put load on this ground field. Companies and businesses interface their financial rank by producing few outlines to the exterior world so as to retain the interest of employees‚ shareholders‚ investors‚ customers‚ etc. This statistics is shared in the outline of financial declarations‚ annual reports‚ etc which makes it easier on the decision making procedure as well. Besides‚
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the SOX was to fix auditing of US public companies ‚ also SOX improvement of the quality of audits in an attempt to eliminate fraud in order to protect the public’s interest‚ as well as for the protection of the investors (Donaldson‚ 2003). The necessity of implementation of a security measure that would protect the investor and the public leads SOX to augment the role of auditors in enforcing federal securities laws against fraud and theft within public companies .( read on http://www.Sarbanes-Oxley-And-The-Pcaob-1018426
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many think of is The Enron Scandal. This same scandal produced the Public Company Accounting Reform and Investor Protection Act of 2002. This much needed act created the Public Company Accounting Oversight Board under the Security Exchange Commission ’s supervision. This board sets accounting standards and investigates Certified Public Accountants and companies to ensure they are following the guidelines set forth. This board has also been given the authorization to fine‚ suspend and recommend
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(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 Act of 2002. The biggest way that SOX impacted financial reporting is that it ended self-regulation of the public accounting industry. SOX achieved this by establishing a independent
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Analysis of case 1.4 Sunbeam: The Revenue Recognition Principle 1. Company history ← In April 1996‚ Sunbeam appointed Albert Dunlap as its CEO and chairman. ← Immediately‚ the CEO began replacing nearly all of the upper management team and led the company into aggressive corporate restructuring. ← As at end of March 1997‚ the company arranged special sales contract with the wholesaler provided that the wholesaler could return all of the merchandise‚ with Sunbeam
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with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. PepsiCo is also a dominant player in the snack food segment in India. PepsiCo’s snack food company Frito-Lay is the leader in the branded potato chip market. It manufactures Lay’s Potato Chips; Cheetos extruded snacks‚ Uncle Chips; traditional namkeen snacks under the “Kurkure” and “Lehar” brands; and Quaker Oats. Manufacturing facilities of PepsiCo
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Ethical and Legal Obligations in Accounting Background Accounting is the “process of identifying‚ measuring‚ and communicating economic information about an organization for the purpose of making decisions and informed judgments.” (Marshall et al‚ 2003) The use of this information has widespread application to company managers‚ investors‚ creditors‚ employees and government agencies. For sound decisions to be made based on this information‚ the profession of accounting has created several agencies
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Effectiveness In the United States public corporations are always trying to earn more and intice more investors. Sometimes this makes public companies act unlawfully and commit fraud to keep the company going. Lawmakers are trying to prevent this fraud and protect the investors In 2002 President Bush signed the Sarbanes Oxley Act to protect the investors. “The Sarbanes Oxley Act mandated strict reforms to improve financial discloser from corporations and prevent accounting fraud (Investopedia.com)”.
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The Sarbanes-Oxley act was created in 2002‚ requiring companies to have more sufficient internal control over their financial statements. The old “I wasn’t aware of that” from executives is no longer acceptable and in fact can result in jail time for the executives and others involved. The company can also lose their exchange listing‚ lose of D&O insurance or face large 7+ figure fines. The act was a direct response to corporate scandals‚ such as WorldCom‚ Enron and Tyco who covered up or misrepresented
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Sarbanes-Oxley Act The Sarbanes-Oxley Act of 2002(SOX which is also known as the Public Company Accounting Reform and Investor Protection Act was enacted in July‚ 30‚ 2002 as a prompt response to the financial crimes scandals (Adelphia‚ Enron‚ WorldCom‚ Peregrime Systems ‚ Arther Anderson and Tyco International). SOX establishes new‚ stricter standards for all US publicly traded companies. It does not apply to privately companies. The Act is administered by the Securities and Exchange Commission (SEC)‚
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