ACC 290 Week 5 DQ3
ACC 290 Week 5 DQ3
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This 0 page Study Guide was uploaded by kimwood Notetaker on Friday November 13, 2015. The Study Guide belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 13 views.
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Date Created: 11/13/15
Week 5 D03 What is the SarbanesOxley Act of 2002 Why did it come about How have the new rules in the SarbanesOxley Act of 2002 affected the way accounting departments and companies operate What are some positive outcomes from these changes The SarbanesOxley Act SOX requires that all publicly traded US corporations are required to sustain a satisfactory structure of internal controls In addition to internal controls each organization must be able to confirm their compliance by an independent outside audit SOX came about because of public outrage to lack of corporate integrity and accounting dishonesty Major corporations such as Enron and WorldCom were dishonestly reporting accounting figures to investors and such dishonesty led to the major losses in investor s money SOX requirements have improved corporate honesty in reporting because their required practices increase corporate and financial responsibility increase financial disclosure and fight against fraudulent activities SOX requirements build trust between investors and clients through compliance activities and controls The creation of SOX has been beneficial to businesses because it has brought changes that improve corporate transparency improvement of internal controls and created more trust between the general public and the large organizations SOX has also forced organizations to provide reliable and accurate financial statements By requiring that an outside and unrelated accounting firm verify the information accuracy SOX is eliminating any risk that might have come from a con ict of interest from a firm that has a stake in the organization It has also caused upper management to take responsibility for corporate activities therefore creating the environment for ethical behavior References Kimmel P D Weygandt J J amp Kieso D E 2011 Financial accounting Tools for business decision making 6th ed Hoboken NJ John Wiley amp Sons
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