Question

In: Accounting

Accounting fraud was a hot area and sensitive for the SEC in the early 2000s following...

Accounting fraud was a hot area and sensitive for the SEC in the early 2000s following a barrage of scandals at companies such as Enron, Worldcom and Parmalat to mention a few. In your opinion what is the significance of Sarbanes-Oxley Act of 2002 in combating accounting fraud in public companies?

Solutions

Expert Solution

These scandals resulted in decline of Public trust in accounting & reporting practices. The Sarbanes-Oxley Act of 2002 covers issues such as auditor independence, corporate governance & enhanced financial disclosure.

The significance of Sarbanes-Oxley Act of 2001 in combating accounting fraud in public companies are as follows:-

1.) Creation of the Public Company Accounting oversight Board.

2.) Accelerated reporting of Insider trading.

3.) Enhanced criminal 7 civil penalties for violation of securities law.

4.) A requirement that Public companies evaluate & disclose the effectiveness of their internal controls, as they relate to financial reporting & that independent auditors for such companies"attest" to such disclosure.

5.) Document & Test the Internal control over financial reporting.

6.) Evaluate the operating effectiveness of significant control.

7.) Internal Control over Financial Reporting is meant to ensure the integrity of the financial statements & guard the assets of the company.

ekkarill92 answered 2 months ago
Next > < Previous

Related Solutions

In the early 2000s, many news stories reviewed the questionable accounting practices and financial collapses of...
In the early 2000s, many news stories reviewed the questionable accounting practices and financial collapses of major corporations, such as Enron, Worldcom, and other companies. Do you think accounting rules can be developed and applied in a way that would prevent corporate failures?
In the late 1990s and early 2000s, there was an explosion in the issuance of bonds...
In the late 1990s and early 2000s, there was an explosion in the issuance of bonds backed by mortgages, also known as mortgage-backed securities (MBSs). The underlying cause of the financial crisis was a combination of debt and mortgage-backed assets. True or False Credit Default Swaps are a kind of insurance on bonds. True or False In 1999 the Depression-era Glass-Steagall Act (1933) was partially repealed, allowing banks, securities firms, and insurance companies to enter each other’s markets and to...
As per a published report…” In the late 1990s and early 2000s, Nokia was the global...
As per a published report…” In the late 1990s and early 2000s, Nokia was the global leader in mobile phones. With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.” List and briefly explain 2 factors that might have been overlooked by the business(es), referred...
As per a published report…” In the late 1990s and early 2000s, Nokia was the global...
As per a published report…” In the late 1990s and early 2000s, Nokia was the global leader in mobile phones. With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.” List and briefly explain 2 factors that might have been overlooked by the business(es), referred...
A) by approximately how much was the yuan believed to be undervalued during the early 2000s?...
A) by approximately how much was the yuan believed to be undervalued during the early 2000s? Provide 2 pieces of evidence that could possibly suggest that the yuan was actually undervalued during the early 2000s. (Hint: think about China macroeconomic variables) B) thew Peterson institute for international economies argues that as of Feb 2010 there was an "undervaluation of at least 25 percent of China's yuan and the currencies of several important economies surrounding it (Hong Kong, Malaysia, Singapore, Taiwan)....
As per a published report…” In the late 1990s and early 2000s, Nokia was the global...
As per a published report…” In the late 1990s and early 2000s, Nokia was the global leader in mobile phones. With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.” List and briefly explain 2 factors that might have been overlooked by the business(es), referred...
Provide a summary of the aviation industry/business environment for Boeing in the early 2000s. Based on...
Provide a summary of the aviation industry/business environment for Boeing in the early 2000s. Based on the market research, where is the aviation industry going?  What is the market environment and strategy for Boeing? For Airbus?
What was the business environment of enron during the late 1990s and early 2000s? And, how...
What was the business environment of enron during the late 1990s and early 2000s? And, how did this environment incentive the numerous frauds that happened during this period?
Accounting Fraud Investigation and Prevention: please Research the accounting/fraud/forensic field regarding accounting fraud investigation or prevention....
Accounting Fraud Investigation and Prevention: please Research the accounting/fraud/forensic field regarding accounting fraud investigation or prevention. What innovative technologies or procedures are helpful in detecting and preventing accounting and financial fraud? I would really like to understand the subject better.
3. Rising fuel prices in the early to mid-2000s increased the demand for more fuel efficient...
3. Rising fuel prices in the early to mid-2000s increased the demand for more fuel efficient cars relative to that of SUVs. Naturally, profit-maximizing automobile makers tried to respond to this. In this question, I want you to relate this to the idea of the short run and long run production decisions of the firm In what ways were companies like Ford and GM who had largely focused on SUVs and trucks in the “cheap gas era” of the 1990s...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT