Title III relates to corporate responsibility. Section 301 makes audit committee, which must be independent, responsible for appointment, compensation and oversight of any audit work performed by the audit firm. It also allows the SEC to de-list any issuer not in compliance with title III. Section 302 requires principal executive and principal financial officers to certify, in each annual or quarterly report that they review the report, the report does not contain any untrue statement of material fact or omission of a material fact and financial position and results of operations are fairly presented. The officers also certify that they are responsible for establishing and maintaining effective internal control, have evaluated the effectiveness …show more content…
Section 303 prohibits an officer or director of an issuer to fraudulently influence, coerce, manipulate, or mislead the auditor. Section 304 requires executives of an issuer to forfeit any bonus or inventive based pay or profits from the sale of stock, received in the 12 months period after the date of issuance of financial statements subject to an earnings restatement (Claw-back Policy). Section 305 allows the SEC bar any person who has violated federal securities laws from serving as an officer or director of an issuer. Section 306 prohibits trading by officers and directors during blackout periods established between the end of a quarter and the earnings report date. Title III focuses on reducing fraud, mostly related to CEOs and CFOs of public companies. Before SOX and this requirement, CEOs and CFOs simply deny in any knowledge of knowing financial wrongdoing. Now, they require to take more responsibilities on what the company is reporting on financial statements. They have to sign off on financial statements that the financial statements are presented fairly to their best of knowledge and internal control of the company is efficient and
The specific obligations in this case would include monitor corporate governance activities and compliance with organization policies, and assess audit committee effectiveness and compliance with regulations
This memorandum shall provide an in depth analysis of Target Corporation’s performance for the most current for the year 2014. To obtain a better understanding of Target Corporation’s performance the following categories shall be addressed: Preliminary analytical procedures, Accounting policy efficiency and reliability, Evaluation of Disclosure Controls, Evaluating Company’s technology system and its Risks, Substantive Procedures, Payout ratio in the Target Corporation financials, Fraud Considerations and Extended Procedures.
In 2002, Congress passed the Sarbanes-Oxley Act (SOX) to strengthen corporate governance and restore investor confidence. The act’s most important provision, §404, requires management and independent auditors to evaluate annually a firm’s internal financial-reporting controls. In addition, SOX tightens disclosure rules, requires management to certify the firm’s periodic reports, strengthens boards’ independence and financial-literacy requirements, and raises auditor-independence standards.
Throughout the past several years major corporate scandals have rocked the economy and hurt investor confidence. The largest bankruptcies in history have resulted from greedy executives that “cook the books” to gain the numbers they want. These scandals typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of assets or underreporting of liabilities, sometimes with the cooperation of officials in other corporations (Medura 1-3). In response to the increasing number of scandals the US government amended the Sarbanes Oxley act of 2002 to mitigate these problems. Sarbanes Oxley has extensive regulations that hold the CEO and top executives responsible for the numbers they report but problems still occur. To ensure proper accounting standards have been used Sarbanes Oxley also requires that public companies be audited by accounting firms (Livingstone). The problem is that the accounting firms are also public companies that also have to look after their bottom line while still remaining objective with the corporations they audit. When an accounting firm is hired the company that hired them has the power in the relationship. When the company has the power they can bully the firm into doing what they tell them to do. The accounting firm then loses its objectivity and independence making their job ineffective and not accomplishing their goal of honest accounting (Gerard). Their have been 379 convictions of fraud to date, and 3 to 6 new cases opening per month. The problem has clearly not been solved (Ulinski).
The Institute of Internal Auditors. "Internal Auditing's Role In Section 302 and 404 of the U.S Sarbanes-Oxley Act of 2002." The Institute of Internal Auditors (2004): 1-13.
The rise of Enron took ten years, and the fall only took twenty days. Enron’s fall cost its investors $35,948,344,993.501, and forced the government to intervene by passing the Sarbanes-Oxley Act (SOX) 2 in 2002. SOX was put in place as a safeguard against fraud by making executives personally responsible for any fraudulent activity, as well as making audits and financial checks more frequent and rigorous. As a result, SOX allows investors to feel more at ease, knowing that it is highly unlikely something like the Enron scandal will occur again. SOX is a protective act that is greatly beneficial to corporate America and to its investors.
It requires that the annual reports of public companies include an end-of-fiscal-year assessment of the effectiveness of internal control over financial reporting. It also requires that the company's independent auditors attest to, and report on, this assessment. CITATION Ton06 \l 1033 (Noblett, 2006)
The Public Company Accounting Oversight Board, by authority of the Sarbanes-Oxley Act of 2002, is responsible for the creation of auditing and the associated professional practice standards for registered public accounting firms to abide by when preparing and issuing audit reports. The auditing standards relating to audit risk, audit evidence, and the relationship of auditing standards to quality control are outlined in Auditing Standards 1101, 1105, and 1110. This block of standards enumerates the general concepts relating to auditing standards.
The Federal Deposit Insurance Corporation (FDIC) was created in 1933 as an independent agency to provide assurance to banking customers of the availability of their funds in the event of a failure (Federal Deposit Insurance Corporation, n.d.). This student worked as a contractor in a main office of this organization. As a part of her duties, she attended meetings with FDIC employees in which the health of the banking institutions were examined closely. The FDIC worked closely with the chartering institutions to determine which banks needed to be taken over before they failed.
What do you understand by the phrase “stakeholder analysis”? Attempt a stakeholder analysis of an organisation that you are closely associated with.
Responsibility of express opinion of these financial controls and statements within its internal control of such reports. This firm conducted the audit in accordance with PCAOB standards of the United States, which require the plan and performance of an audit for reasonable assurance that those financial statements are both free of material misstatement and that effective controls are in place and maintained to eliminate those misstatements. Our audit of financial statements included examination and testing of internal controls, inventory, payroll, deposits and withdrawals, along with receipts and payments. These evaluation gave the audit team an understanding of the internal procedures and controls when dealing with financial controls and statements, gave the audit team a reasonable basis for our
ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000
This article was about the IRS warning people about scammers trying to scam them out of their money, this is a type of fraud because people are stealing millions of dollars from innocent people by tricking them into giving them money they don’t owe. This has been going on for a long time, as soon as someone found out how to make it believable they did it. This article talked about how the IRS scammers are so successful at stealing people’s money. They said they scare people, if I got a call from the IRS saying what the scammers call says I would be scared to. They said in total the scammers have got $23 million.
Sue and Tom Wright are assistant professors at the local university. They each take home about $40,000 per year after taxes. Sue is 37 years of age, and Tom is 35. Their two children, Mike and Karen, are 13 and 11.
The relationship between capital structure and firm value has been discussed frequently in the literature by different researcher accordingly, in both theoretical and empirical studies. It has also been discussed that whether the firm has any optimal capital structure that has been adopted by an individual firm, or whether the proportions of debt usage is completely irrelevant to the individual firm value.