"> The Sarbanes Oxley Act Dealt With Four Major Issues Accounting Essay – Course Writing Pals

The Sarbanes Oxley Act Dealt With Four Major Issues Accounting Essay

What responsibilities did David Duncan owe to Arthur Andersen? To Enron’s management? To Enron’s stockholders? To the accounting profession?

David Duncan owed Arthur Anderson the albatross to do what a reasonable agent would do in any bearings to accommodate a assignment to assignment with reasonable affliction and skill. Not to agitate business, not to attempt in business adjoin Arthur Anderson while still alive for them as an agent or conduct acts of accumulated espionage, nor to acknowledge Arthur Anderson?s arcane information. Duncan had the assignment and albatross to be honest, and backpack out and chase the orders of Arthur Anderson, so continued as they were legal, and if not to acknowledge the wrongdoing, akin if this will allege him.

As a able accountant, David Duncan had an obligation to record, provide, and adjure to advice apropos the bread-and-butter diplomacy of Enron. Because investors and creditors abode abundant assurance on banking statements in authoritative their beforehand and acclaim decisions, it is acute that the banking advertisement action be accurate and dependable.’ Thus, the albatross Duncan owed to Enron?s administration and Enron?s Stockholders was to exercise the accepted assignment of performance, accomplishment and affliction of the commonly advisable accountant in the aforementioned affairs and beam a accepted of ethical or amusing responsibility. This assignment is not alone about right, but it is adapted by law, and arises from the law of negligence, contract, and fiduciaries; adapted by those in able services, such as accountants.

David Duncan owed a albatross to the accounting profession to advocate and attach to the ethical cipher of the profession. These codes of belief are accustomed throughout the able associations of accountants such as The American Institute of Certified Accessible Accountants, The Institute of Administration Accountants and the Institute of Centralized Auditors. These codes accommodate guidelines for amenable behavior by accounting professionals, and accent integrity, objectivity, confidentiality, and competency.

Duncan bootless in his responsibilities to Arthur Anderson, Enron?s administration and stockholders, and the accounting profession. He did not beforehand his integrity, objectivity, confidentiality, and competency. He did not appropriately chase About Accepted Accounting Principles and acknowledge Enron?s accurate banking status, consistent in an adverse appulse to Arthur Anderson advisers and Enron?s stockholders and employees. Back he doubtable Enron of bent behavior, he bootless to acquaint administration at Enron or Arthur Anderson, his blackout was a acquiescent allowance to their behavior. The American Institute of Certified Accessible Accountants cipher of belief suggests that the best absorption of the applicant is served back accountants accomplish their albatross to the public, already afresh Duncan failed.

What are the ethical responsibilities of a accumulated attorney, such as Nancy Temple, who works for an “aggressive” applicant adulatory to beforehand the envelope of legality?

The able duties of an attorney, who represents or advises auditors, as was the case with Nancy Temple and Arthur Anderson, charge absorb an acquaintance of the auditor’s able responsibilities.

Nancy Temple ultimately owes her assignment to Arthur Andersen as centralized admonition and was ethically apprenticed to accompany the interests of her applicant and in accomplishing so serves the accessible absorption best by apery Arthur Andersen?s interests. As an advocate accepted to the Illinois bar, Nancy Temple was answerable to the Illinois Rules of Able Conduct. These rules appoint able obligations of competence, diligence, communication, and confidentiality. Beneath both the Illinois Rules and the Model Rules, if a advocate apery an alignment “knows that an officer, employee, or alternative actuality associated with the organization” is actionable the law in a address that is “likely to aftereffect in abundant abrasion to the organization,” the advocate shall acknowledge by demography “reasonably necessary” measures that are “in the best absorption of the organization.” Such measures may ultimately aftereffect in the lawyer’s resignation, but shall be advised to abbreviate the accident of absolute arcane information.

Nancy Temple, although not be adapted to acknowledge Arthur Andersen?s arcane information, she could accept adopted to abandon representation of Arthur Anderson?s due to their captivation in artifice and actionable acts.

Under what altitude should an agent such as Sherron Watkins draft the blare to alfresco authorities? To whom did she owe loyalty?

Although accustomed as the “Enron whistle-blower” Sherron Watkins never absolutely blew a whistle. Whistle-blowing is the absolution of advice by a affiliate or accomplished affiliate of an alignment who has affirmation of actionable or abandoned conduct in the organization, or conduct in the alignment that is not in the accessible interest. Whistle-blowing reveals advice that would not be commonly appear in accustomed context. In about every case whistle-blowing involves an absolute or at atomic a declared ambition to anticipate article bad that would contrarily action (Beauchamp, Bowie, & Arnold, 2008; Boatright, 2000).

Sharron Watkins, as a whistle-blower should accept accounting the letter to the Houston Chronicle; Watkins wrote it to Ken Lay, advertence “We’re such a agee company” and warned him of abeyant whistle-blowers ambuscade amid them, and recommended accomplishments to downplay, or abbreviate the accident (Time Magazine; Beauchamp, Bowie, & Arnold, 2008).

In the assurance and beneath which altitude an agent should draft the blare to alfresco authorities there are two theories, DE Georges? Accepted approach and Davis?s Complicity theory.

According to DE Georges? Accepted Theory, whistle-blowing is permissible back the aggregation will do austere harm, the whistle-blower has appear the blackmail to her above but concludes it will not be fixed, and the whistle-blower has beat alternative centralized advertisement procedures. Furthermore, whistle-blowing is adapted back there is acceptable affirmation to an candid observer, and a acceptable acumen to anticipate absolute the blackmail will anticipate the abuse at reasonable amount (Beauchamp, Bowie, & Arnold, 2008).

According to Davis?s Complicity Theory, whistle-blowing is about adapted back the advice derives from the individuals assignment at the alignment and not acquired through actionable means, such as spying. That the alone is a autonomous affiliate of the alignment and are not actuality captivated adjoin their will or coerced. The alone believes there is austere moral wrong-doing, not a harm. The alone believes their assignment will accord or in some way be admiring to the moral amiss if they do not go accessible (Beauchamp, Bowie, & Arnold, 2008).

Sharon Watkins, Vice President and a certified accessible accountant, knew the advice was damaging, both adverse and about wrong, to investors, stockholders, and advisers alike. She did abreast her administrator CEO Ken Lay of perceived irregularities in the accounting practices of Fastow?s Appropriate Purpose entities. Therefore, aural the ambience of both theories, she was justified to active alfresco authorizes.

To whom did Sharron Watkins owe loyalty? Ronald Duska argues that the agent does not accept an obligation of adherence to a company, and that whistle-blowing is permissible, abnormally back a aggregation is harming association (Beauchamp, Bowie, & Arnold, 2008). Additionally, back Sharron Watkins was a affiliate of a able alignment as a Certified Accessible Accountant, she was adapted by their able cipher of belief to address bent behavior on the allotment of her adolescent professionals in adjustment to adapt their profession, accordingly she owed adherence to the public, her profession and herself.

To whom does the lath of admiral owe their primary responsibility? Can you anticipate of any law or regulations that would advice ensure that boards accommodated their primary responsibilities?

In the United States, accumulated law dictates that a lath of admiral charge adviser the administration of the close to ensure that the association is run accurately and finer in the abiding absorption of shareholders. Thus, the lath of admiral owes their primary albatross to investors; they owe both the assignment of care, or due diligence, and the assignment of loyalty, or putting the investors aboriginal in their decision-making.

Boards of admiral are about accustomed as accepting bristles key charges. First, and best important, they charge select, monitor, evaluate, and back all-important alter the CEO of the firm, with a key basal assignment of agreeable in careful, beforehand acceptance planning. Second, the lath is amenable for acknowledging the company?s overarching eyes and cardinal plan, already it is developed by the CEO and his or her staff. Advising and counseling the CEO and alternative top managers as bare is a third action of the board, accent the accent of a board?s assortment of expertise. The board?s fourth albatross is to locate and appoint high-quality lath associates and to appraise the processes of the lath and the achievement of both the lath and its members. Finally, the lath is amenable for ensuring the capability of the firm?s centralized ascendancy systems, a assignment that is now able by the Sarbanes-Oxley Act.

The Sarbanes-Oxley Act of 2002 act was advised to assure actor amount and the accepted accessible from accumulated wrongdoing. The Sarbanes-Oxley Act dealt with four above issues in accumulated babyminding of accessible corporations. First, the act created an blank lath to set and accomplish auditing standards and conduct accessible aggregation auditors. Second, the act advised to advance accountant independence. Third, the act added accumulated responsibility, by acute that CEOs and CFOs accredit all alternate letters absolute the company?s banking results. Accepting ability of the acceptance of apocryphal statements is answerable to bent liability. Finally, the act added banking acknowledgment with attention to the off-balance-sheet affairs and obligations with circumscribed entities and individuals. These key accoutrement of the Sarbanes-Oxley Act accept decidedly able the role of the lath of admiral and accept fabricated managements added accountable.

What responsibilities do government regulators owe to business? To the market? To the accepted public?

“One of the arch responsibilities of government regulators is to ensure that the laws they accomplish are consistently reviewed, and occasionally adjusted, to booty annual of alteration altitude in the world.? Federal Trade Commission

Government regulators, such as the U.S. Securities and Barter Commission, are amenable for administering laws accounting to accommodate aegis for investors. The albatross government regulators owe to businesses is to ensure they are in acquiescence with the laws in effect. With attention to the market, the albatross to ensures markets are fair and honest, and if necessary, accomplish the laws through the adapted sanctions. To the public, regulators owe the albatross of trust, to accommodate the aplomb to the accessible that the bazaar and business are administering operations in a fair, and acknowledged address and to accommodate for abreast beforehand assay and accommodation authoritative by the accessible investors, principally by ensuring able acknowledgment of actual information

Are accounting and law professions or businesses? What is the difference?

A business is a accurately accustomed alignment advised to accommodate goods, services, or both to consumers or alternative business in barter for money. Whereas a profession is a vocation that is to accumulation aloof admonition and account to others for a absolute and audible advantage after apprehension of alternative business gains. In that the primary motive of business is to accomplish a profit, and in accomplishing so may fail, a able is analogously safe as he earns fees for his casework and there cannot be abrogating fees. In establishing a business, no appropriate educational or abstruse abilities are required, alternative than accouterment a need, service, or article to the market, a able is adapted to access a accurate amount or accomplishment assigned by a accurate able body. Best importantly, in a business aloft achievement of the transaction there is no acceptance or adumbrated arrangement of any sort, but in a profession their actions, deeds, or casework do accompany an adumbrated contract, a arrangement which provides that the account or advice provided is truthful, complete, and verifiable. A professional’s acceptable acceptability is one of his or her best important possessions

People charge to accept aplomb in the affection of the circuitous casework provided by professionals. Because of these aerial expectations, professions accept adopted codes of ethics, additionally accepted as codes of able conduct. Codes of able conduct are of absolute accent to professionals and those who await on their services. These ethical codes alarm for their associates to beforehand a akin of abstemiousness that goes above the requirements of laws and regulations.

Professionals apperceive that bodies who use their services, abnormally accommodation makers, apprehend them to be awful competent, reliable, and objective. Those who assignment in a able acreage charge not alone be able-bodied able but charge additionally acquire a aerial amount of able integrity.

Both accountants and attorneys are professions, in that they both charge accumulation aloof admonition for a set fee, they are assassin or apprenticed to accomplish a account and in accomplishing that service, are to provided an honest appraisal or accurate information. Thus they accept a able albatross to their clients, to the government, and to the public.

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