The Sarbanes-Oxley (SOX) Act of 2002 is federal legislation designed to protect publicly held companies from frivolous litigation. The Act makes it m pursue litigation based solely on commentary by company executives and decreased penalties for violation of existing securities laws. True or False
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- The Securities and Exchange Commission denied the amendment of the Articles of Incorporation of Corporation B because it found out the corporation will be used as a drug den. What is the definite ground of disapproval of the amendment? a. The certification concerning the amount of capital stock subscribed and/ or paid is false. b. The purpose/s are patently unconstitutional, illegal, immoral or contrary to government rules and regulations. c. Not substantially in accordance with the Code. d. The required percentage of Filipino ownership of the capital stock under existing laws or Constitution has not been complied with.Explain why a duty to prevent insolvent trading is imposed on directors by statute. Provide an example(Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility?
- Microsoft Corporation is the defendant in numerous lawsuits claiming unfair tradepractices. Microsoft has strong incentives not to disclose these contingent liabilities. However,U.S. GAAP requires that companies report their contingent liabilities.Requirements1. Why would a company prefer not to disclose its contingent liabilities?2. Identify the parties involved in the decision and the potential consequences to each.3. Analyze the issue of whether to report contingent liabilities from lawsuits from thefollowing standpoints:a. Economicb. Legalc. Ethical4. What impact could future changes in accounting standards, both at the U.S. level and theinternational level, likely have on the issue of disclosure of loss contingencies?True or False: The Sarbanes Oxley Act (SOX) only applies to public companies.Disagree. The Securities Act of 1933 ensures investors only that the issuer has complied with all regulations, particularly those involving disclosure of information. The company may still be a weak company without good prospects for success.
- The Boeing Company, manufacturer of jet aircraft, is the defendant in numerous lawsuits claiming unfair trade practices. Boeing has strong incentives not to disclose these contingent liabilities. However, financial accounting standards require that companies report their contingent liabilities. Required: a. Why would a company prefer not to disclose its contingent liabilities? b. Describe how a bank could be harmed if a company seeking a loan did not disclose its contingent liabilities. c. What is the ethical tightrope that each company must walk when it reports its contingent liabilities?C. Give an example and explain securities fraud in violation of the Securities Act of ‘33. D. Explain how Enron “cooked the books” with two of its accounting practicesWhat are the Possible sanctions (Financial penalties) Against company who break the rules of ACCA or IFRS. And How far it successful in avoiding scandals. Please elaborate.
- The Sarbanes-Oxley (SOX) Act was passed by Congress in 2002 in response to the accounting and reporting failures associated wit high-profile investor fraud schemes carried-out by companies such as Enron an WorldCom. True FalseSarbanes Oxley Act of 2002. include the achievements, failure, and challenges of SOX2002. A brief note to describe SOX and why it is enacted. Discuss the corporate scandals that occurred before the enactment of SOX Act and how those scandals could have been avoided if SOX was in place. The second phase of your analysis should discuss the corporate scandals occurred after the enactment of SOX Act clearly highlighting why Sox could not act as a deterrent to the scandals. Do you think there are any gaps in the act or the factors that led to the scandal are just beyond the purview of the SOX Act. Challenges before the SOX act as we move forward.Which of the following is a provision of the Sarbanes-Oxley Act? a. Lessens penalties for corporate fraud b.Developed the Consumer Financial Protection Bureau c. Recommends codes of ethics for financial reporting in corporations d. Makes fraudulent financial reporting a civil offense e.Requires greater transparency in financial reporting
