You may have heard about the accounting scandals of the early 2000s that included Enron, WorldCom, and Qwest Communications. In each of these scandals, investors lost billions of dollars due to questionable accounting practices. In response to these scandals, in 2002, Congress passed the Sarbanes-Oxley Act of 2002, which required publicly traded companies to report on the effectiveness of their internal controls in their SEC filings. Internal controls are procedures and processes in place at a company that ensure reliable financial statements, efficient operations, and compliance with laws and regulations. Management is required to establish, maintain, and assess their internal controls. The following are common controls that companies use to safeguard company assets and improve the reliability of their accounting records. Elements of fraud are:
Solution
ENRON SCANDAL
Enron company has gained waives over the past few years in relation to accounting
practices. Enron stands out as one of the most remarkable failures in business history. The
company engaged in many deceptive accounting practices to hide loses and receive money from
US investors. As a result most studies have given considerable attention to its accountancy
practices. Daniel Kadlec revealed in Times Magazine the whole issue related to the scandal. He
highlighted on Enron
.
You may have heard about the accounting scandals of the early 2000s th.docx
1. You may have heard about the accounting scandals of the early 2000s that included Enron,
WorldCom, and Qwest Communications. In each of these scandals, investors lost billions of
dollars due to questionable accounting practices. In response to these scandals, in 2002, Congress
passed the Sarbanes-Oxley Act of 2002, which required publicly traded companies to report on
the effectiveness of their internal controls in their SEC filings. Internal controls are procedures
and processes in place at a company that ensure reliable financial statements, efficient
operations, and compliance with laws and regulations. Management is required to establish,
maintain, and assess their internal controls. The following are common controls that companies
use to safeguard company assets and improve the reliability of their accounting records.
Elements of fraud are:
Solution
ENRON SCANDAL
Enron company has gained waives over the past few years in relation to accounting
practices. Enron stands out as one of the most remarkable failures in business history. The
company engaged in many deceptive accounting practices to hide loses and receive money from
US investors. As a result most studies have given considerable attention to its accountancy
practices. Daniel Kadlec revealed in Times Magazine the whole issue related to the scandal. He
highlighted on Enron
