1.1. The ENRON scandal The Enron scandal came to light in 2001 and led to the subsequent bankruptcy of ENRON. According to the economist (2002), this scandal pinned the blame for the problems of Enron on the members of the board of Directors, the senior managers of Enron, the auditors of Enron, the bankers of Enron and the Bush administration among other players. The Economist (2002) further stated that “the only missing ingredient on the scandal so far is sex”. The Enron showed the need to reform
financial practices. The chief architects of SOX were US senator Paul Sarbanes and US Representative Michael G. Oxley. Organizations like Enron, Worldcom, Xerox, MicroStrategy, Sunbeam etc. have one thing in common. They all have gone through serious accounting scandals due to flaws in their corporate governance. SOX was enacted as a reaction to these scandals. The other reasons are: 1. For protecting the investors 2. To detect fraud easily by resorting to practices like internal auditing 3. To build
the protocols through which corporations get organized, directed and controlled . Therefore, it is important for the corporations to have structures that have members of the corporate governing body that are results oriented . In addition to this, study has suggested that proper corporate governance reduces chances of organizational problems . In the light of this, the problems range from mismanagement of organizational finances, lack of transparency and accountability on the organizational resources
Polly Peck, BCCI Bank and Maxwell in the UK, WorldCom and Enron in the US, and Parmalat in Italy. The importance of strong corporate governance has assumed a vital role in organizations ever since these highly publicized corporate fiascos. Regulations have been brought in most countries around the world to improve the running of audit committees as an apparatus to reinforce good corporate governance in order to avoid future accounting scandals. Indubitably, it can be perceived that only an audit committee
FRAUD Fraud encompasses a wide range of irregularities and illegal acts characterized by intentional deception or misrepresentation. The Institute of Internal Auditors’ (IIA’s) IPPF defines fraud as any illegal act characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal
results are the muddle of initiatives and suggestions with the aim of solving the issue of expectation gap. Some of the suggestions and initiatives appear to be mundane while some are found to be controversial (Adeyemi & Uadiale, 2011). One research study concluded that expectation gap issue cannot be eradicated. It is believed that the profession of accountancy has resisted change in the process of auditing for a long time that it was not likely to change the initiatives. Considering all these aspects
auditing started from the 1940’s and has taken significant Place in this modern economy.” In the late 1940s, forensic auditing proved its worth during World War II; however, formalized procedures were not put in place until the 1980s when major academic studies in the field were published (Rasey 2009). Forensic auditing is the specialty area of the accountancy profession which describes engagements that result from actual or anticipated disputes or litigation. According Crumbley et al. (2005) “Forensic”
INTRODUCTION 1.1 Background to the Study In the aftermath of Johnson Matthey Bankers’, Enron Corporation, WorldCom incorporated failure and a good number of other corporate financial scandals, issues of corporate governance became the focus of public discussion, as poor governance practice was identified as a major contributor to most of the failures. Furthermore, the tragic event of the Russian financial scandal and Asian financial crisis brought global attention to the crucial
Assignment front sheet Learner name Assessor name BINOY BALARAM ANU ANTONY Date issued Completion date Submitted on Qualification Unit number and title BTEC LEVEL 7 EDSML UNIT 9: MANAGING CORPORATE RESPONSIBILITY IN THE WIDER BUSINESS ENVIRONMENT Assignment title In this assessment you will have opportunities to provide evidence against the following criteria. Indicate the page numbers where the evidence can be found. Criteria reference To achieve the criteria the evidence must show