The Sarbanes Oxley Act And Enron Essay - 1565 Words

The Sarbanes-Oxley Act was signed into law in 2002 and it was ment to ensure that publicly traded companies complied with policies that made their financial records honest and not distorted to make them look better or to make them look worse. This was supposed to cut down on the corporate fraud with accounting. This all started because some companies such as, Enron and WorldCom. Enron was reporting inaccurate trading revenues by acting as a middle man in partnerships and selling back and forth these partnerships and crediting Enron for the profits (Britannica). The government stepped in and investigated their accounting practices and while the investigation was occurring, their accountants started destroying evidence (Britannica). WorldCom, through their accounting records improperly stated $3.8 billion in five quarters (cbsnews). WorldCom should have showed a net loss but WorldCom’s records showed otherwise. WorldCom’s accountant company was the same as the Enron scand al and they claimed that they â€Å"complied with professional and Securities and Exchange Commission standards† with WorldCom. In both companies, the result of their wrongdoing made their stocks completely crash and their top executives in trouble with the law. The Sarbanes-Oxley Act makes companies create an oversight board or in case of the company not making one, by law, the board of directors is the board. The board is responsible to oversee that the financial records of the company is incompliance with theShow MoreRelatedEnron Of The Sarbanes Oxley Act Essay1358 Words   |  6 Pages Enron was a U.S. based energy-trading company. At its height of operation in the early part of 2001, it was booking revenues of about $140 billion (Enron Ethics). At the end of 2001 it declared bankruptcy. The Enron bankruptcy was the largest corporate economic failure at that time, and still remains an example of how corrupt practices magnify in the long run. What led to Enron’s fa ilure was primarily a lack of ethics, and poor accounting practices. This scandal was one of the reasons that new regulationsRead MoreAfter Effects of Enron Scandal and Sarbanes-Oxley Act on the American Market784 Words   |  3 Pages2005). 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 ofRead MoreCorporate 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 MoreEvents Leading Up to the The Sarbanes-Oxley Act Essay examples1203 Words   |  5 PagesThe 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. 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The Collapse of Enron CorporationRead MoreThe Sarbanes Oxley Act Of 20021563 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 conduct themselves in a manner that promotes public trust. Through defining a code of ethics, organizations can follow, the market becomes fair for investors to have confidence in the integrity of the disclosures and financial reports given to them. The code of ethics includes the promotion of honest and ethical conductRead 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 become s 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 Sarbanes Oxley Act Of 20021525 Words   |  7 Pagesthe Sarbanes-Oxley Act of 2002 (Cheeseman, 2013). Congress ordered the Sarbanes-Oxley Act of 2002 (SOX Act) to shield customers from the fraudulent exercises of significant partnerships. This paper will give a brief history of the SOX Act, portray how it will shield general society from fraud inside of partnerships, and give a presumption to the viability of the capacity of the demonstration to shield purchasers from future frauds. History of the SOX Act Congress established the Sarbanes-Oxley ActRead MoreSarbanes Oxley Act Paper934 Words   |  4 PagesRunning Head: SARBANES OXLEY ACT Sarbanes Oxley Act Introduction Sarbanes Oxley Act is focused towards identifying accounting frauds in different public companies. This paper discusses about various reasons for the introduction of Sarbanes Oxley Act and causes that has been overlooked. Causes for Sarbanes-Oxley Act Sarbanes Oxley Act is US federal law, which is established in order to set out the some standards for accounting firms, public company boards and managementRead MoreAcc403 Assign 1-Sarbanes Oxley1057 Words   |  5 PagesSarbanes-Oxley Act Student Name Professor Name ACC 403 – Auditing 8/19/2012 Sarbanes-Oxley Act The Effectiveness of Regulations. There used to be a time in the United States when there were no regulations in place to protect the public from corporate greed and deceit. Publically traded companies used the auditors they had on retainer to audit their financial statements. There was no reason to believe that such large corporations would allow their share holders to fall. That fairytale