Events Leading Up to the The Sarbanes-Oxley Act Essay...

The Sarbanes-Oxley Act was enacted on July 30, 2002. It was enacted by the 107th United States Congress. It is named after sponsors U.S. Senator Paul Sarbanes and U.S. Representative Michael G. Oxley. It is also known as the ‘Public Company Accounting Reform and Investor Protection Act’ in the Senate and ‘Corporate and Auditing Accountability and Responsibility Act’ in the House. The main purpose of this act was to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. This act was enacted as a result to a number of corporate and accounting scandals including those affecting Enron, Tyco internationals, Adelphia, Peregrine Systems, and WorldCom. The†¦show more content†¦After Enron’s scandal, section 1519 and 1520 are very important parts of the act. According to the section 1519, ‘‘Whoever knowingly alters, destroys, mutilates, conceals, c overs up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.† Thus this came as a response of Enron’s bankruptcy and its attempt to destroy, falsify and cover up the documents. Enron officials Jeffrey Skilling, Kenneth Lay and Andrew Fastow faced trials and were later convicted of the crimes they committed. Top officials of Enron altered financial documents in order to hide the debt of the company. They misled the shareholders by showing huge profits in the annual financial reports. These high profits helped them to increase their share prices, which resulted in increases in income and investors. According to the reports, their format of financial statement shown to the public was so complicated that it was nearly impossible for anyone to figure out that all these numbers are altered. Before its downfall, Bethany McLean’s Fortune articleShow MoreRelatedSarbanes Oxley Outline676 Words   |  3 PagesThe Ineffectiveness of the Sarbanes Oxley Act In Corporate Management and Accounting In the early 1990s, a young company named Enron was quickly moving up Fortune magazine’s chart of â€Å"America’s Most Innovative Company.† As the corporate world began to herald Enron as the next global leader in business, a dark secret loomed on the horizon of this great energy company. Aggressive entrepreneurs eager to push the company’s stock price higher and a series of fraudulent accounting procedures involvingRead MoreSarbanes Oxley Act Of 2002 Essay1421 Words   |  6 PagesSarbanes Oxley Act Jason Stigal FIN/571 November 6, 2016 James Traylor Abstract Enron’s fraudulent financial practices lead to the Sarbanes Oxley Act of 2002. Mistakes made by the company and their leadership shocked the world and cost billions. Enron’s leadership could have taken steps to prevent or mitigate the repercussions of their actions. The act restored ethical and reliable financial practices to the market.The major provisions of the act made corporations responsibility forRead MoreThe Sarbanes Oxley Act ( Sox )1728 Words   |  7 Pagesscandals of all time. They perpetrated over *1 $3.8 billion in fraud, leading to a loss of 30,000 jobs and $180 billion losses for investors . 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Prior to its collapse in 2001, Enron was one of the leading companies in the U.S and considered among topRead MoreEssay Financial Services Report1177 Words   |  5 Pagesglobal financial system (GFS) refers to those financial institutions and regulations that act on the international level, as opposed to those that act on a national or regional level (Global financial system, 2005, p1). The International Monetary Fund (IMF), the World Trade Organization (WTO) and the World Bank are considered to be the most important international institutions. The Internal Monetary Fund acts as a lender of last resort to governments in financial distress, e.g. balance of paymentsRead MoreUnethical Behaviors And Situations Of Conflict Within The Workplace1572 Words   |  7 Pagespsychologist in Denver, once said, â€Å"Just as character matters in people, it matters in organizations† (Forbes). As with any accounting scandal, all it takes to avoid them is a simple, basic knowledge of ethics in the workplace to avoid being caught up in the midst of something undesirable for all parties involved. Enron Corporation used to be one of America’s largest corporations that specialized in the trading and supplying of energy. Enron was best known for their expansion movement, when theyRead MoreThe Sarbanes Oxley ( Sox ) Act Of 20021617 Words   |  7 PagesThe focus of this week’s assignment is the Sarbanes-Oxley (SOX) Act of 2002. A brief historical summary of SOX will be presented, including the events leading up to its passage. The key ethical components of SOX will be identified and explained. The social responsibility implications of the mandatory publication of corporate ethics will be assessed. One of the main criticisms of SOX has been its implementation costs, and this specific criticism will be addressed in regards to smaller organizations