Executive Summary: Dirty Guys Vs. Good Guys
Good Guys v/ Dirty Guys
Good Guys v/ Dirt Guys
America has recently been subjected to the dirty side of their economy. Record gains in almost all industries and stocks have feel out from beneath investors leading to distrust and a fair amount of head-shaking in the market. Companies that were trusted like Enron, Worldcom, Goldman Sachs, and others seemed to betray their investors at every turn, while the people responsible walked free with millions of dollars. What was happening here, according to some sources, was that these “dirty guys” were just smarter than the “good guys.” However, the American people replied all the same demanding tougher standards and it seems like they got them. This paper will serve as a guide to Generally Accepted Auditing Standards (GAAS), guide the reader through their use in financial, operational and compliance audits, and explain the …show more content…
The image of the company is in the hands of the auditor at this point and the reports are used to gain investors or warn them. When a company seems less than candid and the auditor reports on it, investors read this as a red flag. Operational audits measure the efficiency or effectiveness of an organization or even a part of an organization. Compliance audits determine whether or not companies are following all pertinent rules and regulations. Which bring us to the Sarbanes-Oxley Act of 2002 (SOX). The SOX basically enhanced responsibility among all parties involved in the accounting process who up to this point had enjoyed a shared innocence that kept all of them wealthy and out of jail. In the context of auditing the SOX enhanced reporting standards and corporate responsibility and created the Public Company Accounting Oversight Board (PCAOB) which serves as the enforcement arm of the SOX and also regulates and proceduralizes
Good Guys v/ Dirt Guys
America has recently been subjected to the dirty side of their economy. Record gains in almost all industries and stocks have feel out from beneath investors leading to distrust and a fair amount of head-shaking in the market. Companies that were trusted like Enron, Worldcom, Goldman Sachs, and others seemed to betray their investors at every turn, while the people responsible walked free with millions of dollars. What was happening here, according to some sources, was that these “dirty guys” were just smarter than the “good guys.” However, the American people replied all the same demanding tougher standards and it seems like they got them. This paper will serve as a guide to Generally Accepted Auditing Standards (GAAS), guide the reader through their use in financial, operational and compliance audits, and explain the …show more content…
The image of the company is in the hands of the auditor at this point and the reports are used to gain investors or warn them. When a company seems less than candid and the auditor reports on it, investors read this as a red flag. Operational audits measure the efficiency or effectiveness of an organization or even a part of an organization. Compliance audits determine whether or not companies are following all pertinent rules and regulations. Which bring us to the Sarbanes-Oxley Act of 2002 (SOX). The SOX basically enhanced responsibility among all parties involved in the accounting process who up to this point had enjoyed a shared innocence that kept all of them wealthy and out of jail. In the context of auditing the SOX enhanced reporting standards and corporate responsibility and created the Public Company Accounting Oversight Board (PCAOB) which serves as the enforcement arm of the SOX and also regulates and proceduralizes