Reference no: EM131202340
Is it possible to write comment on this auditing related written paragraph? If you agree or not agree please indicate and why. “The Sarbanes-Oxley Act was enacted in response to a number of major accounting scandals, including Enron, WorldCom, and Adelphia, among others. The legislation was drawn up in part to hold upper management accountable for the financial statements. The CEO and CFO must sign off on the financial statements and it was surprising to me that this was not required before 2002. Scandals had been occurring for decades without any accountability on the top management officials. I believe a law with this effect was long overdue by the time it was enacted, and even though scandals have not stopped since its inception its focus on accountability has been effective.
The PCAOB was created to keep an eye on the auditors, who were at the very least negligent in the scandals mentioned above. Arthur Anderson's involvement with the Enron scandal seems to go against nearly every ethical standard auditor and accountants in general should be held to. The fact that SOX created an independent oversight board was very beneficial, as the auditors tasked with overseeing the fraudulent companies were often guilty as well.
The effect of Section 404 can be seen in every 10-K report issued, when management assesses its system of internal controls and the auditor opines on that assessment. This requirement has made it very easy to find in the annual report, out in the open in its own section. It invests management in their controls, whereas earlier management could essentially run wild with little accountability.
The other part of SOX that stood out to me was the protection of whistle blowers. It is often very difficult for knowledgeable employees to whistle blow as they fear the repercussions by those they perceive to be more influential. By outlining punishment explicitly for harming whistle-blowers SOX made it easier for those with information to come forward and blow the whistle, which is the most effective way to report fraudulent activities.” Express your opinion.
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Accounting records of the transportation services fund
: In reviewing the accounting records of the transportation services fund, an internal service fund of douglas city, you notice that the fund uses budgetary accounts. this is most likely because
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Line-item amounts for net income and income tax expense
: Howard Co.'s 2016 income from continuing operations before income taxes was $292,000. Howard Co. reported a before-tax income on discontinued operations of $68,000. All tax items are subject to a 32% tax rate. In its income statement for 2016, Howard..
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Annual review that he is the top performing purchasing
: Jim Ramsay is a purchasing agent for Hooks Incorporated. Avery Company is one of the suppliers that Jim works with. Jim hasn’t taken his family on a vacation in over a year. Jim also hasn’t received a raise from Hooks in over two years even though hi..
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What is the total cost incurred to the employer per hour
: Washington Co. employs ten full-time professionals. The budgeted compensation per employee is $60,000. The maximum billable hours for each client are 400. Clients always receive their full amount of time. What is the direct-labor-cost rate per hour? ..
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Sarbanes-oxley act was enacted in response
: Is it possible to write comment on this auditing related written paragraph? If you agree or not agree please indicate and why. “The Sarbanes-Oxley Act was enacted in response to a number of major accounting scandals, including Enron, WorldCom, and Ad..
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Make the original lease entry
: On January 1, 2014, P & P Products entered into an agreement to lease a piece of equipment from Beta Company, Inc. (the lessor). The lease term is five years and the interest rate is 8 percent. The first payment is made on January 1, 2014. Make the o..
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The equity method of accounting for investments
: A company uses cash to pay all of the following except. Temporary investments such as in trading securities are. Interest revenue on bonds is reported. The equity method of accounting for investments
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While engaged in audit procedure-alternative procedures
: While engaged in an audit procedure, alternative procedures are sometimes necessary. While verifying the existence and ability to be collected on certain assertions, the auditor will seek positive confirmation from the debtors. When referring to cert..
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What is adjusted basis in her partnership interest
: At the beginning of 2015, Margaret’s adjusted basis in her 50 percent interest in MP Partnership, a calendar year general partnership, was $10,000. During 2015, Margaret did not make any additional contributions to MP Partnership, and Margaret’s shar..
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