Verified Document

Accounting Scandals: With The Accounting Term Paper

Accounting Scandals: With the accounting scandals in 2002 and 2003, many have called for increased government regulations. Will increased regulations help to reduce the kinds of scandals seen in recent years? Why or why not?

The accounting scandals at Enron and WorldCom that implicated such trusted accounting firms as Arthur Anderson did result in more stringent government regulation of the accounting process. Google the phrase 'accounting scandals of 2002' and in virtually every web search engine one types this phrase, the words 'Sarbanes-Oxley Act' appears, including software is designed to comply with the accounting procedures required by this recent, landmark act. But what does the Sarbanes-Oxley Act mean, a sixty-six page act designed, according to the stated purpose of the law, to ensure full and fair disclosure of corporate financial records, with the aim of protecting investors?

The act is considered the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public accounting since the U.S. securities laws of the early 1930s, after the Great Crash. Sarbanes-Oxley stipulates criminal and civil penalties for securities violations. Also, it mandates auditor independence from the interests of the firm, meaning that accountants cannot have a financial interest in the success or failure of the firm. Additionally, it mandates the certification of internal audit work by external auditors and mandates increased disclosure regarding executive compensation, insider trading and financial statements, in the interest of making more information public to investors. ("Sarbanes-Oxley Compliance," Technet 2005) Although the act is not a panacea, increased objectivity on the part of auditors and greater insistence on free and fair disclosure on the part of firms will hopefully ameliorate the some of the hiding of vital information that created the climate of secrecy within the firms of Enron and WorldCom that helped give rise to the 2002 scandals.

Works Cited

Sarbanes-Oxley Compliance." (2005) Technet. Retrieved on 23 Oct 2005 at http://www.techlistings.net/xlist/tech/bizsoft/compliance/sox?id=1

Sarbanes-Oxley. (2002) Law retrieved by findlaw on 23 Oct 2005 at http://news.findlaw.com/hdocs/docs/gwbush/sarbanesoxley072302.pdf

Cite this Document:
Copy Bibliography Citation

Related Documents

Accounting Ethics: The Enron Scandal
Words: 1286 Length: 4 Document Type: Research Paper

Loyalty to the client was clearly placed above loyalty to the overall public good and the standards of the profession. "Enron paid Andersen $25 million for its audit…and $27 million for 'consulting' and other services" which meant that Anderson had a substantial financial stake in retaining Enron as a client (Kadlec 2002). The Enron case illustrates the difficulty of self-policing within the industry. Today, providing additional services besides the

Accounting Ethics of Accounting There Have Been
Words: 1532 Length: 4 Document Type: Essay

Accounting Ethics Ethics of Accounting There have been breaches in the ethics of accounting in recent times. With that in mind, evaluate whether or not the current trend in the regulation of business establishments is favorable to ethical behavior. Supply supportive evidence to your answers (Jeter, 2003). The generally accepted principles of accounting and the standards of auditing in contemporary practice stipulate that the financial statements of any establishment should contain the following

Accounting Profession in 2014 in
Words: 5140 Length: 15 Document Type: Essay

However, they have also changed the face of the accounting profession in a way that will affect the education and conduct of accountants in the future. In the future, the accountant will have to do more than to balance the books. In order to understand the potential educational requirements for accountants in the future, we will examine how they have changed historically and then apply the changes that have

Accounting in Crisis Between December
Words: 721 Length: 2 Document Type: Term Paper

(Ibid.). Major Changes in the Accounting Profession The financial scandals proved to be a turning point in many ways for the accounting profession. The public outcry forced the legislatures to reexamine the regulatory environment for businesses, resulting in the enactment of the Sarbanes-Oxley Act in July, 2002, which is the most significant accounting legislation since 1933. It also forced the accounting professionals and their organizations such as the American Institute of

Accounting for Income Taxes the
Words: 2863 Length: 10 Document Type: Term Paper

This process has been ongoing since then. One of the major differences between the two standards is going to be that whereas GAAP emphasizes rules, the IFRS is a principle-based approach. Implementing a principles-based approach has significant implications for American tax practice. Many of the specific differences between the two systems will have a direct impact on tax practice. In IFRS, LIFO is prohibited and inventory write-downs may be reversed

Accounting Internal Control Is the Methods and
Words: 933 Length: 3 Document Type: Essay

Accounting internal control is the methods and procedures used to ensure the accuracy and validity of the financial statements, as well as to protect against abuse and fraud, making sure information is delivered in an accurate and timely manner. (Griffin) Internal controls consist of information systems and physical controls that are carried out in the line of job duty. The two primary goals of internal control is to ensure that

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now