The Importance Of The Sarbanes-Oxley Act
In 2001, Enron, one of America’s leading energy companies, disappeared overnight. At its height, Enron had “a stock price over $90...a marker value of 70 billion… [and] gigantic executive compensation incentive packages” (Giroux). After being exposed of unethical business and accounting methods, Enron eventually went bankrupt. Enron was convicted of fraud, money laundering, conspiracy, and over 50 other charges. The Enron Scandal is a watershed moment in accounting because of the exposure and reevaluation of faulty business administration and unethical business ethics, the creation of the President’s Corporate Fraud Task Force, and the creation of the Sarbanes-Oxley Act.
The Enron Scandal is a watershed moment because it revealed holes in …show more content…
The Sarbanes-Oxley Act is a law that prevents fraudulent accounting by having senior management certify the accuracy of financial statements. The Sarbanes-Oxley Act requires the use of a tracking system and the possession of financial documents for a certain period of time. Although it sounds simple, the Sarbanes-Oxley Act is very strict and must be followed verbatim. Because of this, fraudulent accounting has drastically fallen. The Sarbanes-Oxley act has changed the accounting industry by creating new standards. By creating new standards for accountants to follow, Enron’s collapse has led to laws that prevent an event like it from occurring …show more content…
Enron provided electricity and natural gas for people across the nation, gave thousands of people jobs, and funded President Bush. When Enron fell, people from across the nation felt the effects. People lost electricity, stocks, and jobs. This led to the creation of the Sarbanes-Oxley Act, the President’s Corporate Fraud Task Force, higher energy prices, and a rise in unemployment. Furthermore, Enron was the straw that broke the camel’s back. The fall of companies like Worldcom and Tyco did not change society outside of the economy. In addition, few of them had laws made because of them. Although previous scandals have occurred, the fall of Enron in 2001 is the most influential watershed moment in
The Enron Scandal is a watershed moment because it revealed holes in …show more content…
The Sarbanes-Oxley Act is a law that prevents fraudulent accounting by having senior management certify the accuracy of financial statements. The Sarbanes-Oxley Act requires the use of a tracking system and the possession of financial documents for a certain period of time. Although it sounds simple, the Sarbanes-Oxley Act is very strict and must be followed verbatim. Because of this, fraudulent accounting has drastically fallen. The Sarbanes-Oxley act has changed the accounting industry by creating new standards. By creating new standards for accountants to follow, Enron’s collapse has led to laws that prevent an event like it from occurring …show more content…
Enron provided electricity and natural gas for people across the nation, gave thousands of people jobs, and funded President Bush. When Enron fell, people from across the nation felt the effects. People lost electricity, stocks, and jobs. This led to the creation of the Sarbanes-Oxley Act, the President’s Corporate Fraud Task Force, higher energy prices, and a rise in unemployment. Furthermore, Enron was the straw that broke the camel’s back. The fall of companies like Worldcom and Tyco did not change society outside of the economy. In addition, few of them had laws made because of them. Although previous scandals have occurred, the fall of Enron in 2001 is the most influential watershed moment in