...Telecommunications faced such a dilemma. For the first time, Excello was on track to finish out the year below anticipated financial goals, which would resonate throughout the company and its’ stock. This presented Excello with the task of searching for solutions while maintaining ethical and legal choices to the betterment of all parties involved. While searching through problem solving solutions, Reed learned of a pending sale on December 20, 2010 to Data Equipment Suppliers in the amount of $1.2M. The entering of this sale into Excello’s accounting system would cover the companies’ shortfall for the year thereby insuring satisfactory financial performance for 2010. However, the client has requested that due to a lack of storage space for the equipment at the present time, Excello hold the order under January 11, 2011. This information sent Reed to Marty Fuller, the Controller, to seek out the best way to record the sale in 2010 to enhance the years-end reports. While discussing the situation with Fuller, Reed emphasized that the transaction must be recorded in 2010 and that whatever accounting is done be defensible using the Generally Accepted Accounting Principles (GAAP). This is essential in maintaining compliance with both state and federal legal requirements for financial reporting. GAAP reporting is mandated for use on a federal level for all financial reports. These principles are typically issued by the Federal Accounting Standards Board (FASB) but are regulated...
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...How Sarbanes-Oxley Has Impacted the Auditing Profession Auditing (BME-214024-02-11FA1) Table of Contents Introduction 3 Internal System and Process Collaboration Is Critical For SOX Compliance 3-5 Analyzing SOX by Section to Assess the Impact on Auditors: Section 302 5 Section 404 5-6 Section 409 6-7 Section 802 7 SOXs’ Impact on the Audit Profession 7-8 Conclusion 8-9 References 10 Introduction In the past decade or so government-mandated compliance legislation within the auditing profession, such as the Sarbanes-Oxley Act of 2002, has created a significantly greater amount of opportunities for providing services. However, it has also introduced an entirely new and higher level of complexity as a result. In this paper I will evaluate how the Sarbanes-Oxley Act has and is continuing to influence the auditing profession, specifically concentrating on how the advantages and disadvantages of the Sarbanes-Oxley Act are impacting this profession today and in the future. Although Governance, Risk and Compliance has grown significantly as a framework for ensuring corporate-wide compliance with government-based reporting and auditing, there is still a considerable gap between actual auditing practices and performance to standards (Jelinek, Jelinek, 223). The lack of internal controls over the auditing process has created significantly more work for companies to ensure...
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...MAIN ADVANTAGES AND DISADVANTAGES OF THE SARBANES-OXLEY ACT (SOX) OF 2002 When the US Congress hurriedly passed the Sarbanes-Oxley Act of 2002, it had in mind combating fraud, improving the reliability of financial reporting, and restoring investor confidence. Perhaps SOX's most burdensome element was Section 404, which says that it is management's responsibility to maintain a sound internal control structure for financial reporting and to assess its effectiveness; and that it is the auditors' responsibility to attest to the soundness of management's assessment and report on the state of the overall financial control system. (Wagmer & Dittmar, 2006) “The apparent motivation for the Sarbanes-Oxley Act was to combat the financial statement fraud problem that continues to plague the United States, as embodied by Enron, WorldCom, Global Crossing, and too many others. Simply stated, Sarbanes-Oxley takes direct aim at the perceived drivers of fraud by attempting to strengthen board and audit committee oversight, increase auditor vigilance and independence, strengthen internal controls and risk management, and create accounting fraud penalties with a significant deterrent effect “(Boatright, 2004). THE UPSIDE OF SARBANES-OXLEY/ADVANTAGES In the Business and Professional Ethical journal, (Gorman, 2009) discusses the Advantages of the SOX Act below * Reduces disclosure process cost, enhance the productivity of internal controls management and increases investor confidence...
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...sharing your accounting-related knowledge and expertise and by sharing your teamwork skills. The SOX compliance works were done by the SOX compliance manager with the help from various department managers and their staffs prior to 2009. Due to the limitation in resources, some of the SOX documents were out of date. I joined the SOX compliance team in 2009 to help the documentation of SOX related processes and controls. This year’s major project is to perform a walkthrough of all the business cycles which is planned from February to early July. The purpose is to ensure the SOX documentations are up to date, as well as identify potential areas of improvement. This project is being performed by me and the SOX Compliance Manager, as well as helps from managers in various business units. Why is it an important project? Although the documentation and the assessment of internal control over financial reporting are required by the Sarbanes-Oxley Act of 2002, internal controls have been exist many years before the enact of the act. The act is served as a wake-up call to the management for the importance of having effective internal control environment. Radiant Systems, inc. implemented the SOX documentations in 2004. At the time of implementation, the PCAOB had not yet published the AS 5, which emphasized a top-down approach for assessing the internal control framework. The SOX documentation and the internal controls framework of our company were based on AS 2, which required more...
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...Sarbanes-Oxley Act of 2002, commonly called the SOX, is a United States federal law that was passed in response to a number of major corporate and accounting scandals (veracode.com/solutions/sox-compliance.html, 2011). The act was passed to strengthen corporate governance and restore investor confidence. It was sponsored by US Senator Paul Sarbanes and US Representative Michael Oxley. The act was passed in response to a number of major corporate and accounting scandals, the most popular being Enron, in the United States (audit-is.com/legislation/sox.htm, 2011). As a result of Enron’s scandal and public bankruptcy, congress passed the act which required all public companies that have business in the United States to have an accounting framework (Nelson & Stanley, 2011). The Sarbanes-Oxley Act made it mandatory for all public companies to contain internal financial auditing controls and to present the results in annual assessments. The results must be reported to the Securities and Exchange Commission (SEC) on an annual basis. Furthermore, the Sarbanes-Oxley Act of 2002 requires all public companies to have an external auditor. The external auditor will audit the company’s internal control reports of management and their financial statements (Baker, Bealing Jr, Nelson & Stanley, 2011). In this paper, I will analyze the new or enhanced standards for all U. S. public company boards, management, and public accounting firms that the SOX required, examine why the new enhanced standards...
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...In the given table, you need to fill in the name of the laws, and correspondingly, fill the sector related to each law. You need to provide a rationale of compliance laws with which a public or a private organization may have to comply. |Compliance Laws |Public/Private |Rationale | | |Private |Assess; identify cardholder data as well as all | | | |related IT infrastructure and processes. | |Payment Card Industry Data Security Standard | |Remediate; eliminate storage of unnecessary data | |(PCI DSS) | |and fix discovered. Report; submit validation | | | |records and compliance reports. | | |Public |Protects the privacy of student education | |Family Educational Rights and Privacy Act | |records, parents certain access rights to the | |(FERPA) | |student’s...
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...The Sarbanes-Oxley Act of 2002 Presented by: Ibrahim M. Conteh; Ruby Proctor Garcia; Kathleen M. Parry; Joseph M. Schmerling; Jaime Ulloa Auditing Theory and Practice 0902 ACCT422 4021 Due: April 29, 2009 Table of Contents Page Number What is the Sarbanes-Oxley Act of 2002? 3 Why was SOX established? 4 When did SOX take effect? 5 What companies were affected and how? 6 What does SOX compliance require? 9 Conclusion 11 References 13 What is the Sarbanes-Oxley Act of 2002? The Sarbanes-Oxley Act of 2002 – its official name being “Public Company Accounting Reform and Investor Protection Act of 2002” – is recognized to be the most significant U.S. federal disclosure and corporate governance legislation since the Securities Act of 1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act), and, the provisions of the Act are significant enough that it is considered by many to be the most significant change to federal securities laws in the U.S. since the New Deal. It is best understood, however, not as a piece of legislation centered on a new concept of regulation, but as a process which mandated that many major reforms be implemented as soon as possible (in some cases, within 30 days) on the precise schedule specified by Congress. In that sense, the Enron and WorldCom debacles provided the impetus of public outrage that...
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...7, 2012 TO: David Cory FROM: Rafael Perez RE: Still Debating the Merits of Sarbanes-Oxley, 10 Years Later (Dunn, 2012) ARTICLE SYNOPSIS Sparking the 10-year anniversary of the passing of the Sarbanes-Oxley Act of 2002 comes some controversy regarding whether the law has proved to be useful, or more of a headache for companies in the United States. Following the huge accounting scandal at the Enron Corporation, the Sarbanes-Oxley Act was passed to change the compliance behind how companies would report their financials. Being enforced by the Securities and Exchange Commission (SEC), the SOX helps monitor corporate governance, reporting of financial statements, and accounting controls. Recently some more discussions arose concerning SOX at a new corporate social responsibility event called COMMIT!Forum. Questions surrounding if mandated corporate disclosure has done more good than bad was on the for front. At the conference, Sen. Sarbanes referenced the ENRON scandal and how the market fell by trillions of dollars, including job cuts, and retirement savings exhausted. "That was the challenge the Senate Banking Committee faced," Sarbanes said. (Dunn, 2012) The senate Banking Committee was then tasked with identifying key problems in order tackle the areas of need, which included weak corporate governance procedures, inadequate oversight...
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...Sarbanes-Oxley Act of 2002 - SOX The finance industry was not always regulated. Prior to the great stock market crash in October of 1929, there was no regulation. After this crash, Congress held hearings to determine the problems and suggest solutions. This resulted in the Securities Act of 1933. The Security Exchange Commission (SEC) was created as a result of the Securities Act of 1933 and the Securities Exchange Act of 1934. The intent of this Commission was to restore confidence to investors by requiring honest reporting, and requiring companies and people who work in the industry to put investors’ interests first. After the fall of several publicly traded companies in 2001, it was clear that the SEC alone was not enough. For this reason and through the guidance of U.S. Senator Paul Sarbanes and U.S. Representative Michael Oxley, Congress passed the Sarbanes-Oxley Act in July 2002 (U.S. Securities and Exchange Commission, 2013). The mission of Sarbanes-Oxley Act of 2002 is stated in Public Law 107-204 (2002), “To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes” (p. 1). To determine if the mission of SOX is successful the following will be discussed; the main advantages and disadvantages associated with SOX, the affects SOX has on public company Chief Operating Executive’s (CEO’s) and Chief Financial Executive’s (CFO’s), the impact SOX has on outside independent audit firms...
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...its servers hacked and corporate emails leaked. Everything that people know about hacking can be summed up in news articles written by the uninformed. Hacking is bad, and there is no arguing that… Or is there? Most of what people know of hacking comes from the news or Hollywood movies such as Hackers and Swordfish. What they see is only one facet of this fascinating, yet misunderstood world. Hacking is not the evil act that some make it out to be. Hacking can also be a good thing. Enter the White Hat, or Ethical Hackers. These are the network security professionals in which no movies are based. Ethical hacking is used to help analyze networks for security flaws, stop attacks in progress and help keep companies in compliance with government regulations such as PCI or SOX. What is Ethical Hacking? Ethical hacking sounds like an oxymoron, but it does exist and is a very handsomely paying career field. The average ethical hacker can make anywhere from $24,760 a year to $111,502 (InfoSec Institute, n.d.). It does not stop there however. Some contracts can net an ethical hacker up to $17,500 in bonuses. (Computer Hope, n.d.). The main role of the ethical hacker is to penetrate a business network in order to recognize and fix security flaws before a “Black Hat” hacker can get to it. There is no such thing as a “fully secure” network,...
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...In this paper the author will describe the main aspects of the regulatory environment which will protect the public from fraud within corporations. The author will pay special attention to the Sox requirement; along with evaluating whether Sox will be effective in avoiding future frauds. Regulatory environment consist of several laws and regulations that has been developed by federal, state, and local governments in order to limit control over business practices. The regulatory environment plays an important role in the positive operation of the financial sector and in the efficient management and integration of capital flow and domestic savings. “The value of the claims of financial institutions on borrowers is dependent upon the certainty of legal rights, coupled with the predictability and speed of their fair and impartial enforcement. Legal and regulatory frameworks that empower the regulator and govern the conduct of market participants form the cornerstone of the orderly operation and development of the financial sector” (Making Finance Work for Africa, 2012). Regulatory compliance has always been a part of doing business. In almost all industry there are a variety of governments and industry regulations that they company must follow in the way that they conduct their business and the penalties of not following the regulations are clearly defined within the company (Doculabs White Papers, 2012). There are many regulations that has been around for a long period of time...
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...Why Accounting Fraud? & Possible Solutions Brian Faanes Rasmussen College Author Note This research is being submitted on 9-12-2011 for Wendell Ellis A140 Financial Accounting 1 course at Rasmussen College by Brian Faanes Most accountants and auditors want to be accurate and honest when it comes to the recording of financial records and statements of the company or firm they work for. However, because of tight relationships between accounting firms and their clients, auditors may unintentionally distort the numbers. In this research paper let us examine some of the conflicts with current accounting practices and possible solutions to improve the corporate accountability and the financial reports they convey to the public and investors. There have been a number of accounting fraud sandals in the last decade, some of these companies include; Enron 2001, Worldcom 2002, Tyco International 2002 and locally, Tom Peters Company 2008. As a result of these most recent accounting frauds, congress passed the Sarbanes-Oxley act in 2002. The Sarbanes-Oxley Act * Applies to publicly traded companies * Established the Public Company Accounting Oversight Board (PCAOB). The PCAOB is a private sector, nonprofit corporation that oversees the auditors of public companies. The PCAOB protects the interests of investors by helping ensure fair, independent audit reports. * Requires that external auditors report to an audit committee, rather than to an organization’s management...
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.................................................................. 4 1.3. Limitations .................................................................................................. 5 1.4 Analysis and conclusion .............................................................................. 5 1.5 Further research ........................................................................................... 6 2. Literature Review: An Overview of Corporate Governance ..................................... 6 2.1 United Kingdom ........................................................................................ 14 2.2 Self-regulation prior to SOX ..................................................................... 18 3. Literature Review: The SOX Act ................................................................ 19 3.1 Enron, the trigger to SOX? ........................................................................ 22 4. The Sarbanes Oxley Act: Radical Reforms in Key Areas ....................................... 26 4.1 Establishing the Public Company Accounting Oversight Board (PCAOB) ......................................................................................................................... 26 1 Student ID: 082168461 4.2...
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...malicious software from a company issued laptop. To help stay current with technology and compliant with federal laws Jacket-X decided to install a new Identity Management (IdM) system with Single Sign On (SSO) features. Several employees and customers do not like the new IdM system due to having privacy and data access concerns. This paper will analyze and discuss potential threats and vulnerabilities within the Jacket-X Corporation enterprise network. The paper will identify various IT security measures that will address the known threats and vulnerabilities. There will be discussions and recommendations made for choosing the best IdM system for Jacket-X. These discussions will also consist of the company addressing SSO privacy concerns, SOX compliance, inadequacies of current company IT security, and possible implementation issues with the new IdM system. Vulnerability Assessment for Jacket-X Corporation Computer technology in today’s society is continuing to grow at a rapid pace throughout the world. Systems are being designed in order to share the same networks and time-sharing processes....
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...Riordan Corporate Compliance Plan University of Phoenix LAW 521 William Eshelman February 19, 2012 Riordan Corporate Compliance Plan “The low end of the range without an effective program can be higher than the high end of the range with an effective program” (Youngberg, 1998). Statements such as this are exactly why a comprehensive compliance plan should be in place for any successful organization. Financial penalties are implemented for lack of compliance plans. There are various methods and calculations used to determine the amount of these fines. These penalties are lowered and can even be offset in some cases with a good compliance plan in place. Instituting a corporate compliance plan is also a viable tax deductible. To address Riordan’s possible liabilities, we must be sure of its ability to implement the plan in opposed to the risks of the violation. It could prove more difficult and cost ineffective if it is difficult to adhere to the plan. To implement a compliance plan effectively, an internal audit is necessary. Some points to consider during this audit are: a. Size of our organization b. Involvement of board directors and execs c. Company resources available to implement this plan This proposed plan is for all employees. Compliance with the program starts with the officers and directors of Riordan. All employees of Riordan are expected to follow the set standards. The administration of Riordan is no exception to the set standards. This...
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