Flournoypresentation

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Flournoypresentation

  1. 1. What is the Sarbanes-Oxley Act of 2002 and why should business majors know it importance?<br />By: Khaalis J. Flournoy<br />Date: June 6, 2010<br />Instructor: Mrs. Owens<br />
  2. 2. Summary<br />This power point is to inform on the Sarbanes-Oxley Act of 2002.<br />It gives insight on how it came about.<br />Companies that it has affected.<br />The Pros and Cons by debate.<br />Includes why it is important to know about the SOX as known as the Sarbanes-Oxley Act of 2002.<br />
  3. 3. What is the SOX’s?<br />Sarbanes-Oxley Act of 2002 was signed July 2002 by president George W. Bush.<br />It was made to regain the confidence in the shareholders that were affected by the companies that were committing fraud.<br />It made companies have new regulations and rules.<br />
  4. 4. Founders of the SOX<br />Michael Oxley<br />Paul Sarbanes<br />
  5. 5. WorldCom, Enron, and Tyco<br />Later 2001 and early 2002 WorldCom, Enron and Tyco were the companies that released false information to the general public and their shareholders. <br />The more revenue the company had the more shareholders they would receive, so the companies would overstate their financial statements.<br />
  6. 6. Continued<br />WorldCom was the first to fall and then the shareholders begun to wonder why.<br />The company had just recent reported that they were growing but they only reported growth to get more shares in their company. <br />The shareholders fought for the pensions and savings.<br />
  7. 7. Continued<br />WorldCom among many other companies were bought to justices.<br />Although being in court WorldCom still tried to cover their trail.<br />WorldCom paid their external auditors and accounting firms to destroy important files and the actual financial statements.<br />
  8. 8. Continued<br />Employees of WorldCom admitted that the Financial specialist and CEO’s told them to overstated the financial statements for more future profits.<br />WorldCom could not win because of the Sarbanes-Oxley and how external auditors and accountants were finding all their reports and financial statement.<br />
  9. 9. New rules and Regulations<br />The Sarbanes-Oxley Act of 2002 made it mandatory to keep certain record pertaining to audits such as:<br />Voicemails, emails, recorded personal phone calls, work with errors, letters, memos, notes, income statements, statement of owner equity, balance sheets, revenue, Journal entries, and net income.<br />
  10. 10. Continued<br />All of the new files under the Sarbanes-Oxley Act of 2002 must be kept for at least five years or more.<br />
  11. 11. How the Sox has protected the General public?<br />The general public has argued that the SOX’s has been a good help to know which company is the best company to invest with and if the company that you are investing with is reporting false information.<br />
  12. 12. How the SOX has affected the small business owners?<br />Some small and large companies has argued that following the SOX’s rules and regulations is very expensive it has become a burden for the small business owner.<br />Most small business owners has reported that is to expensive to pay an internal auditor/accountant and an external auditor and accountant.<br />
  13. 13. Who is penalized for false information?<br />The larger companies compared to the WorldCom and Enron have complained that is not fair that everything that is reported from their company will be the responsibility of the CEO.<br />If the company reports false information the CEO will be blame for the false information and the external auditors/accountants.<br />
  14. 14. Basic Behaviors and Sentences<br />The destruction or cover up of any records with the intent of obstructing a federal investigation. Fine and/or up to 10 years imprisonment.<br />Failure to maintain audit or review “workpapers” for at least five years. Fine and/or up to 5 years imprisonment.<br />
  15. 15. Who has to follow these rules?<br />According to the Sarbanes-Oxley Act of 2002 the all the rules and regulation apply to any company that provides a service to the public and especially to companies that have shareholders and that is connected with stock trades nationally and internationally. <br />
  16. 16. Conclusion<br />The Sarbanes-Oxley Act of 2002 was made for the public. I was also made to regulate the companies that have shareholders and trading grounds.<br />Some have argued that it is not fair and it is hurting the American financial world.<br />
  17. 17. Work Cited<br />www.washingtonpost.com<br />Carl S. Warren, James M. Reeve, and Jonathan E. Duchac. Accounting and Finance 22E. Mason: Rob Dewey, 2007, 2005.<br />Graphics: www.nysscpa.org<br />How Sarbanes-Oxley has affected the Education of Accounting and Business related majors?<br />www.crroconference.org<br />www.financialforum.umb.edu<br />The fall of WorldCom, Tyco, and Enron after the Sarbanes-Oxley.<br />Feldman. Dorothy A. and William J. Read “Auditor Conservatism after Enron” Auditing 29.1 (2010):267-278 Business Source Complete, EBSCO, Web. 28 May 2010<br />

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