2001that Section 906

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Different governments across the world enact different acts to different business and investors in order to help them in curbing specific challenges facing various business. The provisions of this acts apply in both public and private companies and overs the major responsibilities that are expected to be carried out in order to ensure this provisions of the act are followed. In the following discussion we are going to look at Sarbanes-Oxley Act which was a United States federal law.

Question One

The main reason for the emergence of this Act was the occurrence of scandals that affected very big companies in the United States. The major scandals were Enron scandals and WorldCom scandals. Enron scandal was a problem revealed in the year 2001that …show more content…
Question Three

One of the firms involved in accounting scandals is Enron Corporation which was an energy company in the United States. All the people who were involved in fraud of the company were charged for example Arthur Andersen who was the accountant of the company was charged and found guilty of obstruction of justice, he was convicted but was later let free. The shareholders of Enron Corporation made a loss of $11billion by the time the company was being closed. Luckily the government of United States realize how important the corporation was and reinstated it to its initial state, the company is now functioning normally.

The other firm involved in accounting scandal is WorldCom which is a telecommunication company. All the people who were involved in the scandal were immediately taken an action against. The firm made $5.7billion which were in debt and $6billion in cash. Luckily the corporation was also reinstated as soon as possible and branded a new name –WorldCom from its original name –Long Distance

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