Public Company Accounting Oversight Board

(SOX, 2002). After the enactment of SOX, corporate financial reporting was more strict and normative. However, there were a lot of accounting scandals before 2002. And the Enron scandal attracted the most public attention of all the scandals. Enron was created in 1985 and was one of the largest energy companies around the world. However, in 2001 and 2002 the company was disclosed that it had a large debt which was not recovered. Enron’s stock prices fell to less than $1 per share and it decided…

requirements for all United States public company management, boards and public accounting firms. This was the Sarbanes-Oxley Act, also known as the “Public Company Accounting Reform and Investor Protection Act” in the Senate, and the “Corporate and Auditing Accountability and Responsibility Act” in the House of Representatives. (REFERENCE). In addition to setting new requirements for public companies, there are also numerous provisions of the Act that apply to private companies as well.…

order to protect investors, which includes shareholders and stakeholders from fraudulent accounting practices (Protiviti 2011). The creators of the Sarbanes-Oxley act were Paul Sarbanes, and Michael Oxley. The act was designed to provide regulation for financial practices, and to provide corporate governance. The idea behind the Sarbanes-Oxley act was to provide some time of governing body regarding accounting practices within business, and to hold everyone to the same standard. The main focus…

principles and assumptions of accounting and financial reporting. As your new financial advisor I will explain the important changes made by the SOX act and who is impacted by it. Section One The Sarbanes-Oxley (SOX) Act was the reaction to major corporate and accounting scandals, including Enron and WorldCom. The goal of the act is to thwart and dissuade future accounting fraud, safeguard shareholders and increase confidence in financial reporting in public companies and in the United States…

Sarbanes-Oxley Act, Section 301: Public Company Audit Committees, is created to address systemic and structural weaknesses that affecting the US capital markets due to failures of audit effectiveness and corporate financial responsibility that could potentially “threatened the reputation of those markets for integrity (Tsacoumis, S, Bess, S, and Sappington, A, 2003).” Section 301 provided appropriate regulatory authority of the audit committee the power to overseeing the accounting and…

of the best companies in the United States, Enron, resulted in big shock and decrease in the public confidence. After Enron, to improve the public confidence of the United States people and the rest of the world, and also to strengthen weaknesses in the accounting profession, there had to be something done. The introduction of the Sarbanes-Oxley Act was then the key to address all these matters. Passing of Sarbanes-Oxley Act was important in setting the foundation for some accounting principles…

The Financial Accounting Standards Board (FASB) has been the assigned organization in a private sector for establishing standards. These standards are important to be useful because it allows investors to make informed decisions. Financial information must be reliable, consistent and transparent. Transparency refers to high-quality financial statements that are clear and easy to understand. Being transparent in financial reporting allows investors, creditors and the market to properly evaluate…

statements. The Sarbanes-Oxley Act was created because of the multiple accounting scandals of WorldCom & Enron in July 30, 2002. Because of that the investors lose billions of dollars, this negatively impacted financial stock market. Fraudulent accounting transaction and activities of immense business give rise to SOX. SOX was created to end self-regulations of the public accounting firms. It created Public Company Oversight Board (PCAOB), which is an independent, nonprofit organization, which…

Deloitte is one of the Big 4 public accounting firms organized as a limited liability partnership. It has offices in multiple locations, including Wilton, Connecticut, where it houses certain firm-wide functions included as part of its National Office. This case concerns Deloitte’s violation of Act and PCAOB rules when it permitted its former partner, Anderson, CPA, to continue activities related to preparing and issuing public company audit reports after he was suspended for one year by the…

The benefits of the Sarbanes-Oxley Act are that it created greater accountability by top management and board of directors to employees (Thorne, O. Ferrell, & L. Ferrell, 2011, p. 156). The greater accountability will force a business to provide an investment to the stakeholders rather than collect excessive compensation and other benefits (Thorne, O. Ferrell…