Financial Reporting and Analysis
Accounting Quality
The Sarbanes-Oxley (SOX) Act was created with the intent of improving the quality of accounting, reliability of financial statements to investors, and providing oversight to accounting professionals through the creation of a new federal agency, Public Accounting Company Oversight Board (PACOB). Create an argument supporting whether SOX achieved these goals, and whether financial data reported today is more accurate and reliable than prior to the Act. Provide support for your rationale
SOX has been successful, and is comprehensively credited for firming up different areas. One of these areas encompasses CFO and CEO responsibility and accountability regarding all financial disclosures and associated controls. A second aspect encompasses increased competence and commitment on the part of corporate audit committees. Overall, SOX has been quite effective and successful in increasing focus and emphasis on a strong ethical organizational culture in companies (Verschoor, 2012). One of the positive impacts of the SOX Act is that it caused a decline in the number of financial restatements done by companies. In addition, the Act has also brought about a major decrease for class actions filed in terms of securities in the past few years, which implies companies have taken much caution (Harwood and Simmons, 2012). In addition, the Sarbanes-Oxley Act is deemed as a representation of success and accomplishment when bearing in mind the benefits that go along with compliance.
Assess the impact to the Public Accounting Profession with the creation of the PCAOB and the inability of the profession to be self-regulated. Indicate your level of support for the federal regulation of the profession. Provide a rationale for your response
The Public Company Accounting Oversight Board (PCAOB) was constituted to oversee the audits of public corporations' conformance to the Sarbanes-Oxley Act (SOX). PCAOB was formed so as to safeguard not only the investors but also the general public to not only have accurate but also independent audits (PCAOB, 2016). I have a great deal of support for the federal regulation of the profession as it has led to a significant decline in financial scandals. The PCAOB has had a positive impact on the profession. In particular, the PCAOB has issued several general reports, practice strictures for staff as well as other public documentation that shed light on a variety of outcomes that come about in the course of inspections of public companies. In response...
Financial Accounting Accounting Concepts Financial Statements (Regulatory oversight) The rapid failure and bankruptcy of Enron has prompted severe criticism of the nation's financial reporting and auditing systems, which are fundamental to maintaining investor confidence in U.S. capital markets; there are four areas in which the Enron failure revealed serious problems: corporate governance, the independent audit of financial statements, oversight of the accounting profession, and accounting and financial reporting issues (GAO, 2002). The financial
Financial statements are produced in order to help stakeholders understand the financial condition of the entity in question. Different types of entities, however, have different reporting requirements. A self-employed individual has very different needs from a limited company, and these are different from not-for-profit organisations as well. This paper will examine some of these differences. The first class of business is the self-employed individual. There are no reporting standards for self-employed
Financial Statements Identify the four basic financial statements. The four basic financial statements include: the balance sheet, income statement, owners' equity and cash flows. The balance sheet is when there is a focus on the current financial strengths or weaknesses inside a firm. This gives managers, employees, investors and regulators the ability to determine what issues are impacting the company. (Ingram, 2011) ("Four Financial Statements," 2010) The income statement is concentrating on the
The former deducts the inventory figure from the current assets value. In the years under consideration, both the current ratio and the quick ratio of McDonald's decreased (see table 1). In that regard, the company's ability to settle its debts in the short run seems to have been impaired within the period under consideration. It is however important to note that with a current ratio and quick ratio of more
Financial Statement Fraud Report: Rite-Aid Fraudulent financial reporting can really have unfavorable results on companies, as well as, public confidence in capital markets. This paper will examine the financial statement fraud and will also investigate the financial statement fraud that happened at Rite Aid in the beginning of the 2000's. The outcome of Rite Aid's fraud, as well as a lot of other key accounting scandals, led to the formation of
Working capital reduction is not always a bad thing -- tightening receivables and inventory turns is often considered to be good financial policy. In the case of Unilever, it is important to synthesize the two statements. We can see, for example, that "unusual expense" is the category most responsible for the change in working capital. At this point, it would be advisable to delve deeper into the comments in the
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