Sarbanes-Oxley Research Paper - 2807 Words

Sarbanes-Oxley Act of 2002 Research Paper Imagine over $60 billion of shareholder value, almost $2.1 billion in pension plans, and initially 5,600 jobs - disappeared (Associated Press, 2006). One would have to wonder how that is possible. These are the consequences the investors and employees of Enron Corporation endured after the Enron scandal started to unravel. This paper will focus on the infamous accounting scandal of Enron Corporation. It will also discuss how the company was able to fool investors by producing misleading financial statements, why they were not caught sooner, and new regulations enacted in response to the scandal. Enron Corporation was a leading American energy company located in Houston, Texas. The†¦show more content†¦One of the major items in GAAS states that auditors must remain independent in both fact and appearance. However, Arthur Andersen was not only auditing Enron, they were consulting for them as well. The consulting that Arthur Anderson was doing for Enron brought in a lot of revenue therefore, they did not appear independent. Although various auditors documented conflicts with the audit committee of Enron and several other concerns, the leading partner on the audit, David B. Duncan, overturned the issues and concerns. Due to the active role Arthur Anderson had in Enron Corporation, they overlooked many accounting concerns and the fraud was undetected for a long period of time. However, the truth about Enron was eventually brought to light for the investors, employees, and the general public. The accounting misstatements were discovered Enron told investors they were going to restate their earnings for the past few years. Shortly after Enron restated their earnings, the company declared bankruptcy. Also, Sherron Watkins, an Enron Vice President, wrote an anonymous letter to Kenneth Lay who stepped up as Enron’s CEO after Skilling left due to â€Å"personal reasons†. Sherron Watkins’ letter questioned Enron’s acc ounting methods and also proposed that Skilling left due to dishonest accounting and otherShow MoreRelatedSarbanes Oxley Act Research Paper1787 Words   |  8 Pagesï » ¿Sarbanes Oxley Act Research Project Brielle Lewis MBA 315 March 6, 2014 I. Abstract The purpose of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities law, and for other purposes. (Lander, 2004) The Act created new standards for public companies and accounting firms to abide by. After multiple business failures due to fraudulent activities and embezzlement at companies such as Enron Sarbanes andRead MoreSarbanes-Oxley Act Research Paper1097 Words   |  5 PagesSarbanes-Oxley Act of 2002 Karla Azcue ACC 120-09 Mr. Donald Senior The Sarbanes-Oxley Act of 2002 is one of the most important legislations passed in the 21st century effecting financial practice and corporate governance. This act was passed on July 30, 2002 thanks to Representative Michael Oxley a republican from Ohio and Senator Paul Sarbanes a democrat from Maryland. They both passed two different bills that pertain to the same problem which had to do with corporations auditing accountabilityRead MoreBus 591 Complete Week 5624 Words   |  3 PagesBUS 591 Week 5 Sarbanes-Oxley Act of 2002Methods of Depreciation Sarbanes-Oxley Act of 2002/Methods of Depreciation. Select one of the following topics for your research paper: Research and discuss the Sarbanes-Oxley Act of 2002. Identify key components of the Sarbanes-Oxley Act of 2002, and its primary objective. What are some of the criticisms surrounding the Act? Are there any economic consequences for companies as a result of implementing the Act? 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In 2002 the Sarbanes-Oxley Act passed by the U.S. Congress to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corpora te disclosures. With the research I have done I believe that withRead MoreSarbanes Oxley Act And Its Effect On Market Liquidity1289 Words   |  6 Pagesseller (Abella, 2016). The Sarbanes Oxley Act in 2002 incentivized institutions to keep more accurate and attainable records of business. The Act being based off of the fraudulent activity of several high profile companies (eg. Enron), was put in place to better monitor and record a companies transactions, improve management style, and promote ethically responsible behavior in the workplace (Keneth, 2015). Our main purpose is to determine whether or not the Sarbanes-Oxley Act had an affect on marketRead MoreThe Sarbanes Oxley Act Of 20021600 Words   |  7 Pages The Sarbanes-Oxley Act of 2002 Sophie Cook Houston Baptist University â€Æ' The Sarbanes-Oxley Act 2002 Introduction In the early 2000s, corporate financial statement fraud was rampant, as companies such as Enron and WorldCom used shady accounting practices to inflate their revenues and hide losses. This led to the introduction of the Sarbanes-Oxley Act of 2002, the most extensive form of accounting reform legislation ever passed. It had many consequences for publicly traded companies and publicRead MoreSarbanes Oxley Outline676 Words   |  3 PagesThe Ineffectiveness of the Sarbanes Oxley Act In Corporate Management and Accounting In the early 1990s, a young company named Enron was quickly moving up Fortune magazine’s chart of â€Å"America’s Most Innovative Company.† As the corporate world began to herald Enron as the next global leader in business, a dark secret loomed on the horizon of this great energy company. Aggressive entrepreneurs eager to push the company’s stock price higher and a series of fraudulent accounting procedures involvingRead MoreThe Sarbanes Oxley Act Of 2002 Essay1070 Words   |  5 Pagesof Sarbanes-Oxley Act of 2002. This Act was placed into law to protect the consumer against fraudulent activity by organizations. This paper will provide a brief history of the law and discuss some of the ethical components and social implications on corporations. This research will provide information on how the Sarbanes-Oxley Act affects smaller organizations and how it encourages employees to inform of wrong doings. Brief Synopsis of Sarbanes-Oxley The U.S. Congress passed the Sarbanes-OxleyRead MoreThe Sarbanes Oxley Act Of 20021563 Words   |  7 PagesThe Sarbanes-Oxley Act of 2002 (SOX) was enacted to bring back public trust in markets. Building trust requires ethics within organizations. Through codes of ethics, organizations conduct themselves in a manner that promotes public trust. Through defining a code of ethics, organizations can follow, the market becomes fair for investors to have confidence in the integrity of the disclosures and financial reports given to them. The code of ethics includes the promotion of honest and ethical conduct