Mgt 320 – Sarbanes-Oxley and the Federal GovernmentFinal PaperMGT 320The Legal Environment of BusinessI have been asked what changes, if any, I would recommend to the Federal government to increase the effectiveness of corporate governance. The topic of corporate governance came to the forefront in 2001 when the accounting fraud scandal at Enron led to the collapse of the company and the loss of about $11 billion for the shareholders, many of whom were retirees. A lack of oversight from the company’s board and questionable auditing practices led to the fall of the company. The result was a quick response from Congress with the Sarbanes-Oxley Act (SOX) which calls for more transparency in financial reporting and more layers of auditing to insure accuracy.
Pilot of the Better Business Bureau is now in the process of being issued and the company is already facing a serious financial crisis.
This pilot program provides a blueprint to a whole new group of stakeholders as the Federal Government takes action against any companies that employ employees that are engaged in corporate corruption. As part of all this effort, the pilot will provide an ongoing stream of additional documents in compliance with both Corporate Governance Standards and the Better Business Bureau standard, as well as a number of other federal guidelines.
Answering the Audited Questions of Business Members has become an important part of corporate governance, and it is important that the Federal government is able to use its best resources to provide a fair and transparent, sustainable and efficient environment for business development. The GAO will now be conducting a two-part report on this issue. First, the GAO will review the audited question and answer processes in each of these two parts; it is the second part of the GAO’s audit that will follow. Second, the GAO will begin a third and final examination to evaluate whether, if and how government efforts to reduce corporate governance should be used to create a sustainable and efficient environment for the business community.
The GAO conducts a two-part audit each quarter to determine whether any changes in executive direction are necessary to achieve the objectives of the Better Business Bureau. Although the GAO reviews the questions from companies, it provides information about how they respond to the audit. In addition, the GAO provides updated audits of companies and how they respond to questions about financial audits and other relevant regulatory questions if the company considers them to be relevant to the development of the business. The GAO also provides some additional financial statements so that companies can track the progress of their business.
The audit is currently being conducted by the Internal Revenue Service, the Federal Trade Commission (FTC) and the Commission (the FTC) and is under review by the Federal Trade Commission which is conducting an analysis of the various approaches that the Federal Government uses to investigate corruption.
The audit is available here: http://www.ftc.gov/public-disclosure/a2/pdf/FTC-Faster-Consumer-Enforcement/Faster-Enforcement_2011/fasterpdf.pdf
. It will be reported to the Committee on Oversight and Government Reform in the Senate later this month. More information about the audit can be found on the GAO website.
Please sign this petition to urge Senators to immediately issue these changes before they make significant changes to the regulations that take effect on July 1, 2010.
Sarbanes-Oxley, O’Shaughnessy and the other members of Congress are currently proposing new regulatory reforms. The changes would address the following: ———-
### * The Senate Judiciary Committee
[ Senate – Judiciary Committee Report on the Better Business Bureau (The Better Business Bureau) ] (Sections 2 to
Pilot of the Better Business Bureau is now in the process of being issued and the company is already facing a serious financial crisis.
This pilot program provides a blueprint to a whole new group of stakeholders as the Federal Government takes action against any companies that employ employees that are engaged in corporate corruption. As part of all this effort, the pilot will provide an ongoing stream of additional documents in compliance with both Corporate Governance Standards and the Better Business Bureau standard, as well as a number of other federal guidelines.
Answering the Audited Questions of Business Members has become an important part of corporate governance, and it is important that the Federal government is able to use its best resources to provide a fair and transparent, sustainable and efficient environment for business development. The GAO will now be conducting a two-part report on this issue. First, the GAO will review the audited question and answer processes in each of these two parts; it is the second part of the GAO’s audit that will follow. Second, the GAO will begin a third and final examination to evaluate whether, if and how government efforts to reduce corporate governance should be used to create a sustainable and efficient environment for the business community.
The GAO conducts a two-part audit each quarter to determine whether any changes in executive direction are necessary to achieve the objectives of the Better Business Bureau. Although the GAO reviews the questions from companies, it provides information about how they respond to the audit. In addition, the GAO provides updated audits of companies and how they respond to questions about financial audits and other relevant regulatory questions if the company considers them to be relevant to the development of the business. The GAO also provides some additional financial statements so that companies can track the progress of their business.
The audit is currently being conducted by the Internal Revenue Service, the Federal Trade Commission (FTC) and the Commission (the FTC) and is under review by the Federal Trade Commission which is conducting an analysis of the various approaches that the Federal Government uses to investigate corruption.
The audit is available here: http://www.ftc.gov/public-disclosure/a2/pdf/FTC-Faster-Consumer-Enforcement/Faster-Enforcement_2011/fasterpdf.pdf
. It will be reported to the Committee on Oversight and Government Reform in the Senate later this month. More information about the audit can be found on the GAO website.
Please sign this petition to urge Senators to immediately issue these changes before they make significant changes to the regulations that take effect on July 1, 2010.
Sarbanes-Oxley, O’Shaughnessy and the other members of Congress are currently proposing new regulatory reforms. The changes would address the following: ———-
### * The Senate Judiciary Committee
[ Senate – Judiciary Committee Report on the Better Business Bureau (The Better Business Bureau) ] (Sections 2 to
Corporate governance is defined as “the rights and responsibilities among different corporate participants (including stakeholders) and spells out the rules and procedures for making decisions on corporate affairs” (Cross & Miller, 2009). Basically, it demands that the boards of directors perform their duties with both eyes on the best interest of shareholders and not their own personal gain.
Sarbanes-Oxley created rules for financial reporting and demands personal accountability of officers. Specifically, section 302 determines that when a company’s financial statement is submitted, it is signed by the CEO and CFO attesting to the accuracy of the report. This section outlines the officer’s responsibilities and liabilities in ensuring a truthful report is submitted. The act also requires independent auditing by third party auditors.
The Sarbanes-Oxley act led to the creation of the Public Company Accounting Oversight Board (PCAOB). The PCAOB is under the control of the Securities Exchange Commission (SEC). They are tasked with ensuring the auditors of companies conduct their audits in a manner that complies with SOX rules (Hilzenrath, D. 2010).
My first suggestion would be to eliminate the Public Company Accounting Oversight Board (PCAOB). I believe that the PCAOB, which is the primary oversight and enforcement arm for the Sarbanes-Oxley Act, is redundant and those duties should be completed by the Securities Exchange Commission. Whenever you add another layer of oversight to any program, specifically in the case of government agencies, things are automatically complicated. As things are currently designed, the SEC oversees the PCAOB and appoints its directors. Additionally, with a 2011 budget of $204 million, there would surely be savings to be had in the elimination of redundant support services.
One of the issues brought to light with the PCAOB and its relationship with the SEC, is that the U. S. Supreme Court found that “the legal structure of the Sarbanes-Oxley enforcement