Essays on Oxley

Cardillo Travel Systems

The Cardillo Travel Systems case shows the way the management cooked up the books only to be caught later. This essay will attempt to answer some questions on this case. False Representation to External Auditors: The executives at Cardillo Travel Systems were aware it needed to maintain a minimum of $3 million of stockholder’s equity threshold established by the court outstanding against the organization. (Ritterburg, 2012). This was the reason that shaped their intent to falsify the organization’s books to misrepresent facts before investors and creditors. The issue started with the accountants at Cardillo making an improper ...

Introduction

The SOX (Sarbanes-Oxley) Act was enacted in 2002 by the Congress of U.S. As President Bush signed the Act, he characterized the law as the most far-reaching reformations of business practices in America business practices since the reign of Franklin Delano Roosevelt." The motive of the legislation was to protect investors and the public in general, from fraudulent practices and accounting errors in business. The bill also aimed to better the corporate disclosures' accuracy. The Security and Exchange Commission (SEC) of the U.S. is in charge of the act, publishing rules and setting compliance deadlines on requirements. The Act ...

The U.S Securities and Exchange Commission refers to the United States’ agency that is tasked to enforce the securities laws, policies and guidelines, including the country’s stock and options exchange activities. It is the objective of this agency to “ protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation” (U.S, 2017). One of the main roles of the SEC is to ensure that investors who turn into the securities exchange market are protected and activities that are geared towards capital and investment formation are sustained for economic growth.

The Creation of the PCAOB

The Public Company Accounting Oversight Board (PCAOB) was ...

Question 3

The pros of the sole proprietorship involve the simplicity in the decision making process as well as low organizational and the operational expenses. The key drawback involves the unlimited liability to the owner of the firm where he can lose all his personal properties as well as capital in case the firm incurs any losses.

Question 4

A limited partnership tends to allow some of the partners so as to limit their liability. Under this type of the arrangement one or more of the partners are the designated general partners tend to have the unlimited liability for the debts of the ...

Often abbreviated as SOX, the Sarbanes-Oxley Act was signed by the U.S. Congress into law in 2002 (U.S. Securities and Exchange Commission, 2013). The Act was designed to restore public confidence in corporate financial reporting and to initiate reforms in protecting investors from the possibilities of accounting fraud (U.S. Securities and Exchange Commission [SEC], 2013). Congress also enacted SOX 2002 to improve the accuracy of corporate financial disclosures as well as shield the public from bookkeeping inaccuracies (SEC, 2013). According to Jahmani and Dowling (2008), the SOX 2002 was intended to not only advance the accuracy and reliability of ...

Whistleblower Protection Act

The major goal of the Whistleblower Protection Act (WPA) of 1989 was to encourage private-sector employees to report the misconduct of a manager or other top executives. The WPA protects private sector whistleblowers against manager retaliations in the form of demotions, pay cuts, or termination. Under this statute, any disclosure of information will be protected if there is sufficient ground to justify that the whistleblower had a ‘reasonable belief’ that the information was true (Whitaker, 2007). A major component of this law is that whistleblowers are required to present sufficient evidences (documents and other) to justify their claims while ...

Sarbanes-Oxley (SOX) Act was brought to curb corporate fraud and restore investor’s confidence in the integrity of the corporations and executives. Due to SOX, the paperwork for the companies has increased manifold, as the law requires just detailed documentation rather than proactive detection and prevention of fraud. Examples of both its effectiveness and ineffectiveness are given below: Section 404, mandates the management to provide assertions and to be attested by independent auditors that effective internal controls are being applied to the financial reporting. However, Jumpstart Our Business Startups Act (JOBS Act) of 2012 has provisions that eliminate this ...

Managing organizational behavior is an approach to create effective human behavior in the organization. It investigates the actions and attitude of the employee towards each other and organization. It affects the individual and organizational performance and may create complexities in the organizational culture. I have chosen the case study of HealthSouth Corporation that covers the impact of ethical leadership on employee job performance and the company growth. HealthSouth Corporation is providing health care services and based in the United States. The organization is serving the nation with the team of best employees. It is specialized in different health care ...

Ethics in Accounting Profession

Facts: In the current scenario, the main issue is the deviant workplace behavior which is caused by the several workplace professional and ethical problems. On the basis of research, professionals are behaving unethical due to the certain routines in the organization. In the past, the demand and supply of the individuals were under control. However, in the current scenario, the professionals of the highest quality are facing workload. Moreover, the accounting professionals are expecting an increase in their salaries, according to the work load.

Ethical Issues:

The ethical problem with accountants in relation to the deviant workplace behavior is that it ...

Business Ethics

Business Ethics

The managers are responsible to the prevalence of ethical misconducts due to their extent of authority. Managers ensure that employees do not incorporate any unethical practices and understand the organization’s ethical conducts. The prevalence of ethical misconducts among the employees is observed by the managers due to which the managers take necessary actions in order to ensure that the occurrence of such misconducts is hindered. The employees are observed in accordance with the organization’s ethical standards and these standards help in the shaping the organizational behavior and hence, ethical conducts are set (Crane & Matten, 2007). ...

The professional standards i.e. International Ethics Standard Board for Accounting (IESBA) enables a company’s auditors to provide tax services and retain their independence. The standards give permission to audit firms to provide non-audit services if the provision of services does not conflict with the independence needs of auditors. The non-audit services are known as permissible non-audit services ranging from professional advice related to transactions, tax services, and advisory services regarding business activities. The tax services include assistance related to tax return preparation, tax calculations to prepare transactions, and planning and resolution of tax disputes. Absence of conflict enables ...

Introduction

The accounting information system involves the collection, storage, and processing of data concerning financial accounting that is applied by the decision makers (Hall, 2012). Therefore, an accounting information system is computerized to track the accounting operations in conjunction with the resources of the computer. Consequently, the statistical report is used by the management internally and externally by the interested people such as the investors, tax authorities, and creditors. It combines the traditional accounting practices like the Generally Accepted Accounting Principles and the resources of the current information technology. The AIS is composed of six elements as follows: people who ...

INTRODUCTION

Background to the Study  The Russian Federation with seventeen million kilometer square of surface area is the world largest country. The country has a major deposit of oil, timber, coal, natural gas, and a variety of mineral like any other country; designing of healthcare systems is based on the needs of healthcare in Russia. Countries for providing good healthcare to their people invest huge amounts in designing significant policies. Around the world, a wide variety of healthcare systems exists; countries attempt to improve the health of their people because it also affects the economic growth as well. Development of ...

The biggest scandal of the early 21 th century was that of "Enron". The financial collapse of US energy giant happened with the participation of offshore companies. In the 90s the company began to trade, not only gas but also electricity. The Corporation has entered the stock market, which allowed it to have room for financial maneuvering. "Enron" was the largest trader in the electricity market in 2001 and reached TOP-10 in the "Fortune 500" list. Naturally, there were close links with major policies - it is the "Enron" has become a sponsor of the longwall-George W. Bush in ...

Abstract

The Sarbanes-Oxley Act changed the ethical nature of accounting for publicly traded companies. The Act requires new forms of ethical behavior from companies, such as creating and maintaining a code of conduct that all employees, even executives, must follow. It also requires that they honestly and accurately report financial reports and maintains that the executive officers of a company have the most responsibility in reporting and certifying that the information is correct. The Act also changes the auditor-client relationship by making auditing more independent of the client, establishing an auditing committee overseen by the SEC, and ensuring transparency. The ...

Abstract

The paper will explore the business environment and the fraud scandals that prompted the need for more comprehensive and stringent regulations on financial disclosure by all public business entities operating on U.S. soil. The primary financial issues that the Sarbanes-Oxley Act was meant to address will be addressed, with a specific focus on how to restore investor confidence by imposing more strict rules on companies in terms of recording investments, cash flows and periodic profit/loss statements . Through an analysis of the basic provisions of the Act with regards to assigning personal responsibilities on officers of the company, as well ...

How to Reform Corporate Ethics in American Business Today

Corporate ethics is an important sphere of American business the regulation of which is of utter importance. It comprises the rules how the company operates: its management, control and responsibility for improper actions. The regulations of corporate governance and implementation of effective corporate ethical standards affect the situation of the economy of the state. Inefficient regulations may lead to huge problems, such as the Great Depression of 1933, ENRON case of 2007, global financial crisis of 2008, because of which the whole world economy was negatively affected, a lot of investors were defrauded, money stolen and etc. Scholars believed ...

The Financial Accounting and Standard Board (FASB) and the International Accounting Standard Board (IASB) apply to the AT&T Mobility because both are proposing changes in global accounting. Moreover, their rule provides more incentives for companies particularly in changing the terms of the contract in corporations to speed up revenues to achieve quarterly targets. Additionally, the treatment of revenues in AT&T Mobility, the proposal for the changes, may drive the inconsistent allocation of income in particular between its products and payable resources as well as the separation of hosting arrangements. Consequently, AT&T have changed its GAAP accounting to redefine the ...

The fall of Enron

What went wrong and why? Answer. The wrong done in the case of Enron and the reason for the wrong can be described on the basis of the following aspects of their business: Enron’s core business was initially focused on natural gas pipeline and they made exceptional growth in the business. By the end of the 1990s they decided to diversify their business to the newly emerging business of asset management, construction, and Internet operations. Enron entered into foreign markets of Latin America, Asia, and UK with fresh subsidiaries focusing on development of asset management, construction, and internet ...

It was a few years back that the United States market capital saw the domination of financial fraud revelations performed in so called big Companies of the economy. The stakeholders of the Companies like investors, affiliates in the market, and communities had to incur huge historic losses. The top notch corporate leaders were also the ones affected. The corporate veil was lifted in most cases and many of them had to suffer jail term. Industries were affected in the sense that many big names in the industry, including the biggest American audit firm were desperately out of business. The ...

Role of Ethics in Organization Performance

Introduction The current level of executive compensation has raised critical questions and concerns regarding the ethical considerations and implication of such compensation. This paper aims to explain this ethical aspect of the executive compensation. Also, it outlines some of the individual and government approaches to revise the compensation system. The second section of the paper analyzes the role of Sarbanes-Oxley Act in regulating executive compensation levels. This section explains various measures enacted by the act and assess their nature of strictness in addressing this ethical concern.

Section 1

Primarily, a major ethical concern relates to the high amount of executive salary ...

Characteristics of a Whistleblower

Whistleblowing is defined as an unauthorized external or internal disclosure of information which relates to an unethical practice of a superior or a co-worker which has either occurred or is being contemplated (Apaza & Chang, 2011, P.35). Internal disclosure is less damaging than the release of information to outsiders. There are three main characteristics of a whistleblower. The first feature is dissent. In this case, a whistleblower adopts a dissident voice in the society which makes him/her disregard societal taboos and expose matters which are considered secretive. Their dissent makes them value the public interest more than personal loyalty or ...

The concepts and principles related to study of a management issue

The Concepts and Principles Related To Study of a Management Issue Management theories have been developed by scholars to combat administrative matters in corporate companies, but they have not been successful enough to fight issues such as fraud, embezzlement, poor leadership among other issues (Larry, 2016). It is apparent that the government of the United States had to find ways to combat these management problems to avoid scandals that were devastating to the economy. Even with developed policies, the managerial sector is still facing diverse challenges that need strategies that target individual leaders and employees. According to Larry upon ...

The German manufacturer of luxury automobiles, coaches, trucks and buses, Mercedes-Benz is a multinational corporation with several locations worldwide. The Corporation has spread across different nations worldwide, and this paper gives an insight of the Pestle analysis of the corporation in the UK. Mercedes-Benz is a global corporation with a strategic geocentric orientation and perceives the potential market across the globe while striving to formulate a system of integrated global strategies.

Political

The United Kingdom enjoys stable political environment thereby offering a conducive setting for undertaking business development. The country paper on House of Commons (2010, p.26) states that UK ...

As technology has allowed for the ability of the public and governing agencies to track the operations of corporations, the topic of corporate governance has become a major consideration while conducting business. The failure in the past few decades has demonstrated the need for transparency, including the practices of the company accountants. In fact, some such cases have held the accounting department as liable for lack of good corporate governance (Shil, 2008). The processes of corporate accounting have the ability for interpretations that require management by the financial department heads because accounting has the power to establish corporate governance. ...

At a time when the corporate financial sector was faced with issues of malfeasance, Sarbanes-Oxley Act was enacted in a bid to restore the confidence of the public in corporate financial statements. Before this period, the public disclosures had suffered massive misappropriations characterized by inaccuracy, and inadvertent unreliability. It thus became essential for the government to act so that there would be a proper end to the rising cases of accounting fraud (Lee et al. 733-74). Many stakeholders in the industry had become part of a broad scheme that thrived in the unaccountable corporate segments that spewed fraudulent activities ...