It was obvious to many who the collapse of Enron and Worldcom had led to the enactment of Sarbanes Oxley Act of 2002 (SOX 2002). The downfall of…
This question is US SOX on accounting fraud for the three situations (Enron, Worldcom and HealthSouth).
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It was obvious to many who the collapse of Enron and Worldcom had led to the enactment of
Sarbanes Oxley Act of 2002 (SOX 2002). The downfall of these firms was brought on by
big accoun±ng frauds. Shortly aFer the SOX 2002 enactment, accoun±ng scandals had been moreover
uncovered at one different large organisa±on, HealthSouth Corpora±on.
Associated Assessment provides on the aforemen±oned three situations (Enron, Worldcom and HealthSouth)
as well as to the speci²c provisions of SOX 2002 to reply the subsequent ques±ons. The full provision of
SOX 2002 is accessible by method of h³ps://www.sec.gov/about/authorized pointers/soa2002.pdf.
(a) ´or each of the three situations, take into account just one (1) fundamental accoun±ng fraud which you assume had led
to the downfall of the organisa±on. In your evalua±on, you will describe the character of the accoun±ng
fraud, the exact or assessed have an effect on of the fraud on the ²nancial statements of the organisa±on and
the method it might have been prevented or detected ought to there be right inside controls in each of
these organisa±ons at that ±me.
(b) Cri±que which key provisions of SOX 2002, had they been in place at that ±me, might have
prevented or detected the three fundamental accoun±ng frauds you’ll have iden±²ed in 1(a) above.
(c) Using the similar three accoun±ng frauds from 1(a), examine why the auditors at that ±me did not
uncover the fundamental accoun±ng frauds ±mely enough and assess whether or not or not the auditors would have
uncovered the fraud had they been additional vigilant inside the effectivity of their audit.
