Sarbanes Oxley

Sarbanes-Oxley Act Contents Overview3 Enron3 Sarbanes-Oxley Act3 11 Titles4 Major Sections of SOX5 Section 3025 Section 4046 Section 4096 Section 9027 Section 9067 After SOX: What has Sarbanes-Oxley Accomplished & Issues that Remain7 Conclusion8 Overview The Sarbanes-Oxley Act was signed into law in 2002 by President Bush. Sarbanes- Oxley came to be because of corporate level accounting scandals that had then, recently occurred. The most common of these scandals include: Adelphia, Enron, Peregrine Systems, Tyco and, WorldCom. This act â€Å"introduced major changes to the regulation of financial practice and corporate governance. Enron The Enron Scandal is one of many that prompted the obvious need for reform of accounting practices. It began in November 1997 when the company bought stake in another company to create a sub company of Enron. The new company, Chewco, was run by an Enron officer who enabled Enron to run a series of transactions through Chewco and ultimately, funnel deb t from one company to another, even though they were both Enron. By 2001 â€Å"CEO Jeffery Skilling resigns, becoming the sixth senior executive to leave in a year. † In October, Arthur Andersen’s legal counsel advised auditors of Enron to destroy â€Å"all but the most basic documents2. So, the cover up began. Arthur Andersen was once amongst the â€Å"Big 5† accounting firms and the provided tax, audit and consulting services to corporations like Enron. Their reputation plummeted after they were admittedly aware of â€Å"possible illegal acts† committed by Enron and ultimately, Arthur Anderson was dissolved. Sarbanes-Oxley Act Enron and other scandals cost investors billions of dollars. Stock prices were at all time lows and the people were beginning to lose faith in corporate leaders. Something had to be done to restore faith and tighten standards.Sarbanes-Oxley was named after Senator Paul Sarbanes and Representative Michael Oxley. Oxley introduced t he act to the House of Representatives calling it the â€Å"Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002† on February 14, 2002. With minor changes to the name at the Act itself occurring over the span of a few months, Sarbanes-Oxley was officially signed into law on July 30, 2002 by President George W. Bush. Bush called the legislation â€Å"the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.The era of low standards and false profits is over; no boardroom in America is above or beyond the law. † The turnaround of this act was very quick. It was obvious that something needed to be done and it needed to occur quickly. 11 Titles Sarbanes-Oxley is comprised of 11 Titles, each with subsidiary sections. The eleven titles each focus on one main topic and the changes that are implemented by Sarbanes-Oxley under their heading. The names of the titles are as follows: 1. Public Company Ac counting Oversight Board (PCAOB) – this section establishes and provides the need for independent auditors.So now, a corporation could not solely publish audits that were conducted internally. 2. Auditor Independence – establishes the standards that need to be followed when conducting an external audit in order to eliminate conflicts of interest. 3. Corporate Responsibility – Title 3 states that senior executives must take individual responsibility for the lawfulness and correctness of their financial records. The hope here is that higher up executives will not turn the other way when fraudulent activity occurs for fear that they could be prosecuted on a personal level. . Enhanced Financial Disclosures – In this title, the new reporting requirements are laid out for corporations. The new requirements are much more thorough and leave little room for leaving out relevant information. 5. Analyst Conflicts of Interest – This is the shortest title of th em all and aims to help restore investor confidence. It requires any conflicts of interest to be disclosed. 6. Commission Resources and Authority – The goal of this section is to try and restore confidence in securities analysts and states the SEC’s power to bar analysts from practice. 7.Studies and Reports – The Comptroller General and the SEC are required to conduct studies and then report their conclusions and findings. 8. Corporate and Criminal Fraud Accountability – This title gives specific penalties based on various crimes that may be committed and also provided protection for whistle-blowers. 9. White Collar Crime Penalty Enhancement – White-collar crime is punished more based on the law described here, stronger sentencing is key. 10. Corporate Tax Return – The basic requirement here, being only one section, is that the Chief Executive Officer signs the company return.This way, the CEO can’t claim that they didn’t see t he tax return before it was filed. 11. Corporate Fraud Accountability – The SEC is granted the ability and authority to freeze an account where payments seem unusual. Looking for large or unusual transactions allows fraud to be more easily detected. Major Sections of SOX Each of the 11 titles mentioned above are comprised of sections. Some titles only have one section but some have up to nine. In this section I will attempt to summarize the five most important sections: 302, 404, 409, 902 and, 906. Section 302Section 302 outlines the Corporate Responsibility for Financial Reports. It is composed of steps that are taken by the company and specifically ensuring that the CEO is very involved and informed when it comes to the financial statement process. The CEO must sign off on the financial statements and the reports when they are complete. By making the CEO the final eye to see the statements SOX is attempting to ensure that the CEO cannot claim ignorance if a fraud is committ ed. When the major corporate scandals were occurring at places like Enron, CEO’s frequently claimed they had no idea what was going on in their company.This section aims to hold CEO’s responsible for their company reporting, a form of internal control. Section 404 Section 404 is entitled: Management Assessment of Internal Controls. With the implementation of Section 404, companies are now required to include an additional report, an Internal Control Report. The purpose of this report is for management to take responsibility for a proper internal control structure and also for management to vouch for the usefulness and accuracy of this control. If the internal controls that are in place do not suffice, the faults are required to be reported as well.Section 409 Section 409 addresses timeliness when reporting. â€Å"Companies are required to disclose on almost real-time basis information concerning material changes in its financial condition or operations. † This i s a way, because of this legislation, for investors and people outside the company to be as informed as possible with changes inside the company. These changes may or may not be significant but, there is always a chance, from the perspective of an investor, that day to day decisions affect stock prices. Now, stockholders can be almost immediately aware of the changes taking place.Section 902 Section 902 falls under the white collar crime title and describes the illegality of altering, destroying, manipulating or concealing documents. The intent of the fraudster here would be to â€Å"impair the objects integrity or availability for use in an official proceeding. † Section 906 Section 906 also falls under the white collar crime category and specifically, the penalties that will be endured to any person that certifies a misleading or fraudulent financial report. In this section, it is stated that penalties can be up to $5 million and 20 years in prison.I believe this section is put in to make it clear that CEO’s are going to be held responsible for â€Å"signing off† so, it is in their best interest to thoroughly look over statements and reports. After SOX: What has Sarbanes-Oxley Accomplished & Issues that Remain The Sarbanes-Oxley had good intentions. It’s goal was to restore faith in the public and to reduce company fraud. SOX has definitely restored public faith and perception. The titles and sections that SOX includes make it clear to companies and individuals outside the company that reporting standards have been increased.Because of this increase, and the penalties that are disclosed in this statute, it would be hard to believe that any person or company would risk committing a fraud. However, this only addresses the restoration or faith and confidence. Sarbanes-Oxley has not necessarily affected the inside the company policies and procedures. There are a number of people who scrutinize Sarbanes-Oxley for its shortcomings. â₠¬Å"Sarbanes-Oxley was intended to restore faith in the integrity of corporations and executives, yet it hasn't really had a measurable impact on fraud. The new rules that were implemented under SOX simply aim to increase the CEO’s awareness in what statements and reports are being published. However, when these documents are received, analyzed and signed off, there may or may not be an actual internal investigation going on to ensure the correctness of the documents. There is really no way to prove that the documents are fraud free when they reach the CEO. Conclusion The goal of this paper was to summarize the 2002 Sarbanes-Oxley legislation. I discussed the titles that comprise SOX and further went into detail on the most important sections. I am not a critic of this act.I think as far as restoring public perception goes, Sarbanes-Oxley was extremely successful. Also, I think this legislation changed the views of the CEO’s. CEO’s were now explicitly aware of th eir accountability when it came to reporting. This was an extremely beneficial change as, CEO’s use to have the ability to claim ignorance and push the consequences down the corporate ladder. I am sure that if Congress would have taken more time when passing this legislation, it could have been improved upon, but, desperate times†¦ the corporate world needed a drastic change to restore faith and help the economy.There is undoubtedly still fraud occurring and therefore this battle to end it will go on. ——————————————– [ 1 ]. http://www. soxlaw. com/ [ 2 ]. http://www. time. com/time/specials/packages/article/0,28804,2021097_2023262,00. html [ 3 ]. http://www. nytimes. com/2002/07/31/business/corporate-conduct-the-president-bush-signs-bill-aimed-at-fraud-in-corporations. html [ 4 ]. http://c0403731. cdn. cloudfiles. rackspacecloud. com/collection/papers/1940/1940_SEC_In vst_Advisors_Act/X. pdf [ 5 ]. ttp://www. sarbanes-oxley-101. com/sarbanes-oxley-compliance. htm [ 6 ]. http://www. soxlaw. com/s302. htm [ 7 ]. http://www. sarbanes-oxley-101. com/sarbanes-oxley-compliance. htm [ 8 ]. http://www. sarbanes-oxley-101. com/sarbanes-oxley-compliance. htm [ 9 ]. http://www. sarbanes-oxley-101. com/sarbanes-oxley-compliance. htm [ 10 ]. http://www. sarbanes-oxley-101. com/sarbanes-oxley-compliance. htm [ 11 ]. http://www. allbusiness. com/professional-services/accounting-tax-auditing/5220240-1. html#ixzz2D3ZIFMye

Power of organizations Essay

Lee Iacocca was born Lido A. Iacocca, on October 25, 1924 to Nicola and Antoinette, who were both Italian immigrants. His parents were hardworking people and his father Nicola believed that America was a land of opportunities. As long as people were willing to work hard, it America, it was possible to achieve anything. Lee followed his father’s work ethic and when he just a boy of ten years, he would take his wagon to the grocery store and wait outside. He volunteered to take the groceries of the shoppers to their respective houses for a tip. When he turned 16, he worked 16 hours a day in a fruit market. Lee confesses that the depression of the 1930s resulted in a transformation to his personality and he became a materialist. He graduated from college with the goal of earning $10,000 a year till he was 25 and then, he planned to work towards becoming a millionaire (Iacocca, 1984). The depression also made Lee a less intolerant person towards waste in any form: food, clothing or business and a conservative person in his investments. He always knew that disaster can strike any time. During his school days, Lee also faced racial discrimination due to the fact that he was Italian. Moreover, he was pained by the fact that his two Jewish friends were treated worse than he was. When Lee was in Chrysler, he named Gerald Greenwald as the Vice President of Chrysler. He would be the first Jew to enter the top ranks of any of the top three automakers (Iacocca, 1984). After his graduation at Lehigh, he got a job with Ford. But he could not pursue that job at that point in time, because he won the Wallace Memorial Fellowship at Princeton. He Graduated from Princeton and started working for Ford in 1946. Lee married Mary McCleary in 1956 (Iacocca, 1984). Lee considered his family life very important and reserved weekends to spend time with family. Lee’s success in business was not only due to his hard work and education, but also due to his ability to adapt to any situation (Swinfin, 2006). He was also a decisive man and had the ability to take innovative decisions. In 1956, when his district was the last in sales, he introduced a new program called â€Å"56 for 56†. This program made it possible to purchase a new 1956 Ford for 20 % down and $56. 00 a month for 3 years. The program was a huge success and more than 75,000,000 cars were sold and his district secured the first place in sales. Lee also undertook the challenge of the Fairlane Committee, which was responsible for producing a new type of car. Lee analyzed the research data on demographics and buying capacity of Americans and concluded that the car must be small, but needed to hold 4 passengers. There would be a 2500 LB limit, and the cost could not exceed $2,500. 00 with equipment. The end product was the 1964 Mustang (Iacocca, 1984). Iacocca Lee was a good leader who used good marketing research data, surrounded himself with good people, and was open to new ideas. Lee became President of Ford on December 10, 1970. He initiated a program called â€Å"Shuck the Losers†. This program gave managers 3 years to make their departments profitable or sell them off (Iacocca, 1984). This shows that Lee was also highly competitive in approach and stern when he had to be. Though there were many successful projects while he was at Ford, by the end of 1975, Lee started having personal conflicts with Henry Ford II. Lee was fired in July of 1978 and thereafter he joined Chrysler on November 2, 1978. Lee found that Chrysler had a problem in its communication style and team work. He reduced his salary to $1 per year and bargained with the union for cuts in salary and benefits. First, Iacocca announced plant closures, job layoffs, and his plans for the company. His next move was cutting several large models, which were heavily unprofitable, and put the subcompact Dodge Omni and Plymouth Horizon into production. The Omni and Horizon became instant hits, selling over 300,000 units each their debut year (Iacocca, 1988). By 1983 Lee turned around the fortunes of Chrysler and repaid all government loans. Lee made a public statement, â€Å"We at Chrysler borrow money the old fashioned way. We pay it back. † At Chrysler, Iacocca not only overcame a $3. 3 billion deficit but capped it with another $3. 3 billion profit between 1982 and 1984. That represents a net gain of $6. 6 billion, or an average increase in earnings of $6 million per day over the previous period (Harmon and Jacobs, 2006). The administrative style of Lee Iacocca is based on tapping the hidden power of organizations. He peeled â€Å"the encrusting layers of dead habits, vested interests, outmoded strategies and inertia and removed the lid on an enormous reservoir of productive energies. He did it by firing 33 of the company’s 35 vice-presidents and allowing long-suppressed ideas, energies, and talents to rise to the surface† (Harmon and Jacobs, 2006). Thus Lee was responsible for discovering the potential of organizational power. This discovery not only brought into use hidden potentials but also created new possibilities. The administrative style of Lee Iacocca enabled organizational power to maximize the productive and efficient utilization of ideas, resources, energies, and opportunities. He combined the organization power with his personal talents at communication, decision-making, motivating, time management, flexible approach in leading, and innovation to achieve great success as a leader. Lee Iococca, after his successful career at The Ford Motor Company and Chrysler, said, â€Å"I seized the opportunity, but I was no ninety-day wonder. It took me almost forty years of hard work. † This then, was the main reason behind his success.

Report on Design Methods and Technology Project Essay

Report on Design Methods and Technology Project - Essay Example Security nowadays has become complicated due to the increase in criminal activities that have prompted the use of technology in countering them (Angelo 2007). The robots use only the battery and there are obedient to their programming and instructions given to them by the specialized technicians. The robots therefore enable the employment of specialized individuals to control and monitor the robot for security purposes. More resources have been wasted due to investment in inefficiency security systems that are not effective. The public, as a result, suffers from the inefficiencies in the security systems and may decide to invest in other options to maximize protection on their premises. Security at present is thus an important venture that should be managed effectively to ensure that those answerable for crimes are brought to book. Robots are efficient systems that can be put into proper use if employed effectively (Angelo 2007). The robots can improve security significantly and can deal with dangers perpetrated by various people by putting in place strategic measures. The robots are mobile objects using advanced technology to monitor activities around a particular place. The robots are well suited for buildings since they can move smoothly throughout the building. Various robotic systems are used by the military to perform surveillance. One such technology is a drone. It passes over land, and its unmanned reduced the risk of casualties especially where it is monitoring an unauthorized area. There are various financial needs for the efficient running of the project that the report is going to bring forth. The use of robots is quite efficient since the robot is monitored from a distance, and one does not have to be their all the time in the case of humans guarding a particular premise. The robots do not get tired and, therefore, improve the security of an establishment. The robots need finances and the proper components for security robots are

The Impact of Globalisation on BRIC Economises Literature review - 1

The Impact of Globalisation on BRIC Economises - Literature review Example Therefore, BRIC is expected to bring forth changes in the list of the greatest world economies in the near future. On the other hand, BRIC economies are not similar, though they are in the investment classification, whereby others having political and economic alliances, which are from the groups. Nevertheless, among these countries, China has made significant achievement, thereby making them eliminate the need for alliances. BRIC has made a significant effort in conversion of the growing economic influence into a political power, through summits comprising of analysts (The State University of New York, 2011, 1). In this case, the analyst work together in the BRIC countries in order to establish a future economic partnersip in these countries, whereby China will dominate in manufactured goods, provision of services is dominated by India while the field of material supply is dominated by Russia and Brazil (EconomyWatch, 2010, 1). Globalisation has been attributed to the acceleration of international economic integration, which has been unexpected in numerous ways. However, there are expectations that this might contribute to the vulnerability of workers in BRIC economies. There are resenting developments in the world concerning the increased importance of emerging economies, for instance, China has become a large exporter, whereby it has raised its reputation in international production networks entailing off shore business. Therefore, globalisation has enabled these countries to work together in order to counter well-established interests and organizational structures. The relationship between America and Europe has been substantial in facilitating the developments between the BRIC countries. Globalization in BRIC countries that are attributed to integration with the inputs, finished goods and services, which are underscored by increased business transactions in the world trade. In fact, the ratio of trade-to –trade GDP and the shares of

Doing Drastic Procedures to Create a Certain Appearance Essay

Doing Drastic Procedures to Create a Certain Appearance - Essay Example Today, one of the most prevalent changes is the so called â€Å"physical change.† This pertains to the appearance transformation of some people. Anyone who wants to experience this can either select the â€Å"natural way† or the â€Å"scientific way.† The natural method is one that is done with sweat and patience. An example would be, doing some forms of exercise such as jogging and biking to achieve the appearance that a person wants. This entails one to be patient since it would take considerable period of time to achieve the aimed appearance. On the other hand, the scientific way refers to the drastic procedure opted by some for faster results. There are many causes why some people prefer to pass through this kind of procedure. The nature of one’s job and birth defects are some of the widely acceptable justifiable reasons as against lack of self-confidence. First, undergoing the scientific way due to the nature of one’s job is a justifiable cause. The most apparent example is the job of actresses and actors or the artists in the entertainment industry. It is undeniable that physical appearance is their most valuable asset as an artist. It is the artist’s physical look that is always in the spot light. People see them in television, movies, newspapers and in the Internet. Physical appearance is a great factor as an entertainer. It is crucial to their job. Humans always prefer anything that is pleasing to their eyes. It is their first basis. First impression matters in the entertainment industry.

Economic Development More Important Than Democracy in Promoting a Essay

Economic Development More Important Than Democracy in Promoting a Welfare State - Essay Example Essentially, this paper provides various definitions of the â€Å"welfare state condition,† attempts to juxtapose the democratic view with the perspective that favors economic development, and presents a plausible explanation why economic development is more important than democracy. Also, this paper will enumerate several practices that contribute to economic development, thereby, increasing the chances of attaining a welfare state. Definition of Welfare State Over the years, there has been no strict and general definition of the welfare state. Some relate the term to power and industrialisation while others try to refer it as one of the capitalist contradictions. A classic definition of the term is the state’s â€Å"responsibility for securing some basic modicum of welfare for its citizens† (Pierson & Castles, 2006, p.160). Apart from this definition, Asa Briggs (as cited in Flora & Heidenheimer, 2009, p.29) also defined the welfare state as the condition chara cterised by an organised power that uses politics and administration to change the direction of market forces. This can be done in three ways: (1) through ensuring that individuals and families could receive a minimum income regardless of their properties’ market value, (2) by assisting families and individuals meet their social needs, thereby, reducing their sense of insecurity, and (3) ensuring that all citizens, regardless of social class and status, are given the highest standards of social services (as cited in Flora & Heidenheimer, 2009, p.29). The Democracy View vs. Economic Development After the in-depth discussion of the term welfare state, it is worthwhile to present the split views of paternalism and the democracy. Paternalism connotes economic development while democratic views favor a free market model. Throughout the years, there has been an existing clash between paternalism model followed in the 18th century and the emerging free market model that was especial ly advocated by Adam Smith. As a result, there were several insights generated to support its stand as well as to oppose each other’s perspectives. Paternalism, as defined by Abercrombie and Hill (as cited in Varano, 1999, p.26), is an economic institution that organises the productive unit and regulates the relationships between the owners of the means of production and their respective subordinates. Moreover, it is composed of different access to power and resources and an unequal distribution of goods and services. Oftentimes, paternalism emphasises elite control and privilege towards the subordinates. It also attempts to lessen the worst effects of industrial capitalism through combining traditional and community norms. Contrary to this view, some sociologists and economists alike such as Richard Sennett (as cited in Varano, 1999, p.27), contend that paternalism was intended to mask the hidden interest of the industrialists to enforce high level of production. He continue s by citing that paternalism only connotes elite oversight and community welfare instead of advancing the morale of the workers (Varano, 1999, p.27). The free-market model also extremely contradicts to the paternalistic model since the latter was based on some statute laws, common laws, and customs while the former allows the exploration of the

A rhetorical analysis of an argumentative article of your choosing Essay

A rhetorical analysis of an argumentative article of your choosing - Essay Example The article on gun laws was viewed almost by everyone in the world and especially the United States citizens. This was as a result of the Colorado cinema shooting fiasco. The authors’ argument is generally based on the perfect implementation of gun laws in the United States and the rest of the word. This finally will enhance the respect of the sanctity of human life. This paper tries to bring out an argumentative nature of the gun law article. This was because of various opinions from different individuals after the Colorado cinema shooting. According to these composed writers, in 2007, a total number of twelve thousand six hundred and thirty two people in the United States succumbed to firearms related injuries. Another 48676 were admitted to hospitals for gunshot wounds (Bellesiles 28). These two writers are of the opinion that; the restriction gun laws or even relaxing them will reduce the death toll thru shooting which has been a contentious issue in America. These intelle cts on law furthermore argue that proponents of tighter gun laws will definitely do away with these vital and risky weapons falling on wrong hands. These wrong hands in their argumentative article may include criminals, addicted drug users or even the mentally ill individuals (Carter 180). The two with no doubt believe that drug users are majorly the result of the senseless shooting in the public social settings. The gun laws article also criticises the age individuals should be allowed to acquire guns. In the United States, the bare minimum age to hold a gun legally is eighteen years old. This to some extent is not appropriate for these young individuals are not mature for an efficient and effective decision-making (Ramage 98). This according to these two researchers cum writers, in most cases, has also resulted into premature exchange of words and shooting senselessly by the young individuals in the United States. These two writers also believe it is not only in the United States where gun laws are very weak, but this extends to several parts of the world. In a country like South Korea, these prolific writers believe and thus argue that homicide cases related to guns are far less compared to the United States due to strict gun laws which they as well understand is the father of democracy. These examples of fundamentally different states in thefield of gun laws prove that restricting gun laws will actually benefit the populace. These writers, on the other hand, argue that restricting gun laws is more beneficial. Through the restriction of gun laws, the articles firmly believe and argues that day-to-day senseless shooting is curbed totally. Private gun dealers who sell guns ignore critical regulation to those who purchase the guns hence about 85percent of all guns used in crimes unrecovered by law enforcers are linked to them. All these private party sales allow almost everybody to put a stockpile of weapons (Spitzer 238). This as well greatly undermines the g overnment efforts to control the illegal firearms in the country. A private party gun sale is completely unwarranted. This makes the private party gun sales comparable to over the counter purchase of home effects. There are those who argue and believe that relaxing gun laws would create a safer state. Gun advocates and gun manufacturers strongly argue that more guns equals’ tighter security as every gun holder can act as a police. An example is where a criminal or terrorist who pulls out an assault automatic rifle to start