Another challenge facing the industry today is the important legal issues that surround the Sarbanes-Oxley Act (Koehn & Del Vecchio, 2004). One of these is the fact that the process of due diligence practiced by many companies is now taking much longer (Koehn & Del Vecchio, 2004). There is a higher degree of caution than was previously utilized and because of this many companies are discovering information that would have gone unnoticed before the Act was passed. This is, however, not the only legal issue that the Sarbanes-Oxley Act has caused (Koehn & Del Vecchio, 2004). Another concern is that accountants and attorneys could now be required to report the known wrongdoings of corporations that they have business with to authorities.
Since lawyers are now required to disclose these types of issues, the attorney-client privilege has been compromised by this Act (Koehn & Del Vecchio, 2004). However, the Act was necessary in the face of all of the corporate scandal that came to light in 2003 (Koehn & Del Vecchio, 2004). This was indicative of a much larger legal issue, which was that corporate individuals all over the country were breaking the law and assuming that they were safe because their attorneys were not allowed to say anything about it. It was clear that this had to be stopped, regardless of the other potential legal problems that the Act might create (Koehn & Del Vecchio, 2004).
How corporations are governed has been affected by this Act as well, because these corporations know that they can no longer get away with some of the things that they did in the past. Accountants are also having a more difficult time (Koehn & Del Vecchio, 2004). Like attorneys, they must now alert authorities to potential wrongdoing where before they were not required to give this kind of information (Koehn & Del Vecchio, 2004). This puts a great deal of pressure on accountants, but it can be seen that the largest impact rests on the lawyers, because they have the most to lose with this issue and their responsibility level has been elevated much beyond what it was.
Misconceptions
A common misconception about accountants is that they are all stodgy people who do not know how to have any fun. In reality, this is not the case. Accountants like numbers. They enjoy working with them and they are, presumably, good at what they do. However, they are also human beings like everyone else and they enjoy all kinds of activities. With that in mind, it is very important...
An increase in the number of businesses, changing financial laws and regulations, and increased scrutiny of company finances will drive growth. In addition to openings resulting from growth, the need to replace accountants and auditors who retire or transfer to other occupations will produce numerous job openings in this large occupation." Following a slew of recent accounting scandals (does Enron ring a bell?), federal legislation was passed to increase penalties,
This role is in response to clients' demands for a single trustworthy individual or firm to meet all of their financial needs. However, accountants are restricted from providing these services to clients whose financial statements they also prepare." (U.S. Department of Labor, Bureau of Labor Statistics, 2009) 1. Public Accounting The work entitled: "The Reality of the CPA's Role" states that modern CPAs work "behind the scenes as trusted advisors in
American Institute of Certified Public Accountants (AICPA) pioneered and mulled over a set of standards for auditing professionals. These eventually became recognized as the 10 generally accepted auditing standards. The 10 generally accepted auditing standards fall under three main categories: General standards -- Audits must be executed by a qualified and adept auditor. All matters relating to the project should be addressed with autonomy in mental attitude. Professional care is to be
The management accounting leads candidates into finance, risk management and even production management. While CMA certification is not necessary to pursue a career in management accounting, it is recommended. The IMA claims that certified management accountants earn on average $25,000 more per year than non-certified peers (IMA, 2011). As with the accounting profession in general, there is increased demand for management accountants. CMAs are in demand because of their ability
Accounting Standards Financial reporting practices and ethical standards in health care finance constitute the foundation of every successful organization. Healthcare organizations and other industries in the general market adopt Generally Accepted Accounting Principles (GAAP). The main objective behind this is to boost the organization's value by maintaining the integrity within and to leverage public trust. This paper summarizes the elements of financial management, GAAP and ethical standards in healthcare finance. Elements of
They then proceed to detail their selected sample (76 NYSE firms that reported at least three annual losses in period's 1980-1985 and that reduced cash dividends. They then implemented various conditions to test their hypothesis that it is the troubled firm's aim to retain preservation of their company, rather than to make a bonus, that causes them to select a certain accountancy plan. In section 2, the authors describe their
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