The Sarbanes Oxley Act: To What Commission Is SOX Meaning?
Unit 1 Assignment
GM506
Strategic Financial Analysis
February 8, 2014
Case 1-10
A). The Sarbanes Oxley Act (SOX) refers to " the Commission" in several sections. To what Commission is SOX referring? SOX is referring to the Securities and Exchange Commission (SEC). This Commission is has the " authority to determine GAAP ( Generally Accepted Accounting Principles), and to regulate the accounting profession ( Gibson, 2013, p. 2)." Because the SEC has the authority over GAAP it also has authority over what is implicated in SOX.
B). Describe the responsibility of the " Commission" in relation to the board. The Commission has oversight of the board and will enforce authority over the Board that …show more content…
The problem with this is that there are so many that can purvey that type of personality and really not be that person. Greed is a powerful thing and if someone of greed can find a loophole they will. The accounting field will not ever be fully cleared of crooked accountants and such. But the laws and regulations will help to pursue those that are crooked and punished them properly. Even those who are honest will sometimes manipulate data to get their reports to add up to what they should be. A more effective form of dealing with the issue of inaccurate data by mistake may need to be addressed. It may just be that for some reason it is not aligning the way it needs to and there may need to be adjustments made that are not able to be found. So precision may not be possible in some cases. This does not necessarily mean that the person who prepared the statements is unfair. unethical or immoral. This is why the auditing practice is in …show more content…
Managing short term earnings at the end of an intern quarterly reporting period is viewed as somewhat more acceptable than engaging in the same activity at the end of the annual reporting period.
The method of managing earnings has an effect. Increasing profits by offering extended credit terms is seen as less acceptable than accomplishing the same end by selling excess assets or using overtime to increase shipments.
E). Comment on management 's ability to manage earnings in the long run by influencing financial accounting. If management influences financial accounting in a postive manner the ability to manage earnings will be successful and will always be compliant and accurate for the most part. It is when management influencing financial accounting in an unethical manner or a bending of the rules, is when it will all go wrong. Bending the rules in any way will allow for the errors or inaccurate information to come back on them. It would almost have a domino effect of one thing after another going wrong. This will also cause issues with investors and stakeholders, and it will really cause issues within the organization as well as for the
GM506
Strategic Financial Analysis
February 8, 2014
Case 1-10
A). The Sarbanes Oxley Act (SOX) refers to " the Commission" in several sections. To what Commission is SOX referring? SOX is referring to the Securities and Exchange Commission (SEC). This Commission is has the " authority to determine GAAP ( Generally Accepted Accounting Principles), and to regulate the accounting profession ( Gibson, 2013, p. 2)." Because the SEC has the authority over GAAP it also has authority over what is implicated in SOX.
B). Describe the responsibility of the " Commission" in relation to the board. The Commission has oversight of the board and will enforce authority over the Board that …show more content…
The problem with this is that there are so many that can purvey that type of personality and really not be that person. Greed is a powerful thing and if someone of greed can find a loophole they will. The accounting field will not ever be fully cleared of crooked accountants and such. But the laws and regulations will help to pursue those that are crooked and punished them properly. Even those who are honest will sometimes manipulate data to get their reports to add up to what they should be. A more effective form of dealing with the issue of inaccurate data by mistake may need to be addressed. It may just be that for some reason it is not aligning the way it needs to and there may need to be adjustments made that are not able to be found. So precision may not be possible in some cases. This does not necessarily mean that the person who prepared the statements is unfair. unethical or immoral. This is why the auditing practice is in …show more content…
Managing short term earnings at the end of an intern quarterly reporting period is viewed as somewhat more acceptable than engaging in the same activity at the end of the annual reporting period.
The method of managing earnings has an effect. Increasing profits by offering extended credit terms is seen as less acceptable than accomplishing the same end by selling excess assets or using overtime to increase shipments.
E). Comment on management 's ability to manage earnings in the long run by influencing financial accounting. If management influences financial accounting in a postive manner the ability to manage earnings will be successful and will always be compliant and accurate for the most part. It is when management influencing financial accounting in an unethical manner or a bending of the rules, is when it will all go wrong. Bending the rules in any way will allow for the errors or inaccurate information to come back on them. It would almost have a domino effect of one thing after another going wrong. This will also cause issues with investors and stakeholders, and it will really cause issues within the organization as well as for the