How Did The Sarbanes Oxley Act 2002 Impact On Enron
The Sarbanes Oxley Act, 2002 Impact on Enron
Derrick Love
California State University San Bernardino
MGMT 355-01
Dr. Coates
November 20, 2014
Abstract
I have chosen “The Sarbanes Oxley Act, 2002” as my law and the Enron Company as my corporation. The Sarbanes Oxley Act, 2002 is a law that has been put in place in the public interest or for the protection of investors, and in furtherance of this Act. The law read as follows,
The Commission shall promulgate such rules and regulations, as may be necessary or appropriate in the public interest or for the safety of investors. The authority of the Commission to set standards for accounting or auditing practices or auditor independence, derived from other provisions …show more content…
After deregulation of natural gas pipelines, Enron was created from the merger of Houston Natural Gas and InterNorth, a Nebraska pipeline company. During the merger, Enron acquire a lot of debt and, because of the deregulation, they did not have exclusive rights to its pipelines. Kenneth Lay, the CEO of Enron, hired McKinsey & Co. to aid in developing Enron’s business strategy. They hired Jeffrey Skilling to develop the plan. Skilling had a background in banking,as well as asset and liabilities. He create a “gas bank” in which Enron would buy gas from a group of suppliers and sell it to a group of consumers, contractually guaranteeing both the supply and the price, charging fees for the transactions and assuming the related risks. Thanks to Skilling, the company created both a new product and a new model for the industry (The …show more content…
The Sarbanes-Oxley Act was enacted in reaction to the of financial scandals that happen in the early 2000s at companies including Enron, WorldCom and Tyco that rattled investor confidence. The act, was created by U.S. Congressmen Paul Sarbanes and Michael Oxley, and was intended in order to improve corporate governance and accountability. Every public company must act in accordance with with Sarbanes-Oxley Act. The Sarbanes-Oxley Act not only influenced the financial side of companies, but also IT departments who are in charge of storing a corporation's electronic records. The act is not a set of business practices and does not specify how a business should store records but it identifies which records should be stored and for how long. Sarbanes-Oxley Act states that all company records, including electronic records and electronic messages, must be saved for "not less than five years." The penalties for non-cooperation are fines, incarceration or both
Derrick Love
California State University San Bernardino
MGMT 355-01
Dr. Coates
November 20, 2014
Abstract
I have chosen “The Sarbanes Oxley Act, 2002” as my law and the Enron Company as my corporation. The Sarbanes Oxley Act, 2002 is a law that has been put in place in the public interest or for the protection of investors, and in furtherance of this Act. The law read as follows,
The Commission shall promulgate such rules and regulations, as may be necessary or appropriate in the public interest or for the safety of investors. The authority of the Commission to set standards for accounting or auditing practices or auditor independence, derived from other provisions …show more content…
After deregulation of natural gas pipelines, Enron was created from the merger of Houston Natural Gas and InterNorth, a Nebraska pipeline company. During the merger, Enron acquire a lot of debt and, because of the deregulation, they did not have exclusive rights to its pipelines. Kenneth Lay, the CEO of Enron, hired McKinsey & Co. to aid in developing Enron’s business strategy. They hired Jeffrey Skilling to develop the plan. Skilling had a background in banking,as well as asset and liabilities. He create a “gas bank” in which Enron would buy gas from a group of suppliers and sell it to a group of consumers, contractually guaranteeing both the supply and the price, charging fees for the transactions and assuming the related risks. Thanks to Skilling, the company created both a new product and a new model for the industry (The …show more content…
The Sarbanes-Oxley Act was enacted in reaction to the of financial scandals that happen in the early 2000s at companies including Enron, WorldCom and Tyco that rattled investor confidence. The act, was created by U.S. Congressmen Paul Sarbanes and Michael Oxley, and was intended in order to improve corporate governance and accountability. Every public company must act in accordance with with Sarbanes-Oxley Act. The Sarbanes-Oxley Act not only influenced the financial side of companies, but also IT departments who are in charge of storing a corporation's electronic records. The act is not a set of business practices and does not specify how a business should store records but it identifies which records should be stored and for how long. Sarbanes-Oxley Act states that all company records, including electronic records and electronic messages, must be saved for "not less than five years." The penalties for non-cooperation are fines, incarceration or both