After Effects of Enron Scandal and Sarbanes-Oxley Act on...

Standard to most businesses is the idea that it is managements only responsibility in an organization to generate profits the best possible fiscal return for stakeholders. This template argues that the fiscal responsibility of the business is paramount, and sometimes ethics and moral tend to be pushed to the backburner (Savage and McEltory, 2005). This is particularly true when one adds the necessity of ethical responsibility from business professionals. The Enron Scandal, for instance, became a global call for accounting reform and clearly reduced the publics confidence in the corporate environment. Briefly, Texas-based energy company Enron used one of the nations most prestigious accounting firms, Arthur Anderson. Enron employed over twenty-thousand people and had revenues over $100 billion. Forbes magazine called the company one of Americas Most Innovative for five years. However, a company whistle-blower told Federal regulators that much of Enrons reported data, signed off on by Anderson, was false.Essentially, Enron reported sales incorrectly, thus the balance sheet showed profits that were false, but increased the organizations stock price and value. Because of the scandal, both companies filed for bankruptcy. The case was so well publicized that the name Enron is now synonymous with scandal, corporate greed, and dishonesty in accounting (Bryce, 2002; Peregrine, 2011). As a direct result of the ENRON scandal, the United States government began to pressureShow MoreRelatedCorporate Scandals And The Implact Of The Sarbanes Oxley Act1472 Words   |  6 PagesA LOOK AT CORPORATE SCANDALS AND THE IMPLACT OF THE SARBANES-OXLEY ACT OF 2002 I. INTRODUCTION An economic boom filled with fraud, collapsed in the early 2000s with the unravelling of Enron in October 2001 followed by the implosion of WorldCom and many others big corporations. The downfall of these major companies led to a wide spread crisis of confidence in the financial markets. A crisis caused by executive greed was able to be magnified when the gatekeepers, the auditors, lawyers and analystsRead MoreThe Sarbanes Oxley Act Of 20021614 Words   |  7 PagesThe Sarbanes-Oxley Act of 2002 (SOX) was enacted to bring back public trust in markets. Building trust requires ethics within organizations. Through codes of ethics, organizations are put in line to conduct themselves in a manner that promotes public trust. Through defining a code of ethics, organizations can follow, market becomes fair for investors to have confidence in the integrity of the disclosures and financial reports given to them. The code of ethics include â€Å"the promotion of honest andRead MoreThe Sarbane s Oxley Act ( Sox )1604 Words   |  7 Pagesreporting has gained substantial attention from the public after the scandals of many high profile companies in the 21st century. Periodic cases of financial statement fraud raise concerns about the credibility of financial reports and are as a result of problem in the capital markets, a dropping of shareholder value, and, the bankruptcy of the company. Thus, to respond to the public pressure over acts of corporate offense, the Sarbanes-Oxley Act (SOX) was enacted in 2002. SOX proposed major changes toRead MoreSarbanes Oxley Act Research Paper1787 Words   |  8 Pagesï » ¿Sarbanes Oxley Act Research Project Brielle Lewis MBA 315 March 6, 2014 I. Abstract The purpose of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities law, and for other purposes. (Lander, 2004) The Act created new standards for public companies and accounting firms to abide by. After multiple business failures due to fraudulent activities and embezzlement at companies such as Enron Sarbanes andRead MoreSarbanes-Oxley Research Paper2807 Words   |  12 PagesSarbanes-Oxley Act of 2002 Research Paper Imagine over $60 billion of shareholder value, almost $2.1 billion in pension plans, and initially 5,600 jobs - disappeared (Associated Press, 2006). One would have to wonder how that is possible. These are the consequences the investors and employees of Enron Corporation endured after the Enron scandal started to unravel. This paper will focus on the infamous accounting scandal of Enron Corporation. It will also discuss how the company wasRead MoreThe Impact Of Sarbanes Oxley Act On Public Companies And The Market1336 Words   |  6 Pages The affects of the Sarbanes-Oxley Act on Public Companies and the Market Shareen Sidhu University of Maryland University College The Affects of the Sarbanes-Oxley Act on Public Companies and the Market The Sarbanes-Oxley Act of 2002 was implemented and designed to â€Å"protect the interests of the investing public† and the â€Å"mission is to set and enforce practice standards for a new class of firms registered to audit publicly held companies† (Verschoor, 2012). During the early 2000 s, the worldRead MoreEffects Of Sarbanes-Oxley Act SOX Essay1860 Words   |  8 PagesABSTRACT This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the governments and the Security and Exchange Commissions concern in promoting ethical standards in terms of financial disclosure in the corporate environment. This paper addresses theRead MoreEffects of Sarbanes-Oxley Act1957 Words   |  8 PagesABSTRACT This paper provides an in-depth evaluation of Sarbanes-Oxley Act, which is said to be promoted to produce change in the corporate environment, in general, by stressing issues of public accountability and disclosure in the financial operations of business. It explains how this is an Act that represents the government s and the Security and Exchange Commission s concern in promoting ethical standards in terms of financial disclosure in the corporate environment. This paper addresses theRead More Sarbanes Oxley Act of 2004 Essay1713 Words   |  7 PagesSarbanes Oxley Act of 2004 The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 by President Bush. The new law came after major corporate scandals involving Enron, Arthur Anderson, WorldCom. Its goals are to protect investors by improving accuracy of and reliability of corporate disclosures and to restore investor confidence. The law is considered the most important change in securities and corporate law since the New Deal. The act is named after Senator Paul Sarbanes of MarylandRead MoreThe Quality of Financial Reporting After the Passage of Sarbanes-Oxley a2946 Words   |  12 PagesResearch Proposal The Quality of financial Reporting after the passage of Sarbanes-Oxley Act Dr. Hassan Ahmed Assistant Professor at Cameron University       Abstract The complexity of business environment necessitates a set of required disclosures in a timely fashion. The full disclosure principle under U.S. GAAP is based on a vague definition that cannot be clearly implemented. The cost of disclosures can be significantly large and can have a negative impact on companies’ future earnings