![]() You should be understand and distinguish the different methods for creating fraudulent financial statements.You should be understand the elements that it takes for a fraud to be committed.This article is meant to explain causes of fraud, the methods used to commit fraud as well as the consequences that come with committing financial statement fraud. This bill is a direct response to the accounting scandals of the publicly traded companies Enron and WorldCom which were facilitated by the once prestigious accounting firm known as Arthur Anderson. The Sarbanes- Oxley act is also known as the SOX act or the Public Company Accounting Reform and Investor Protection Act. In 2002, the Sarbanes-Oxley Act was enacted as a direct response to financial fraud. The 21 st century has seen the collapse of many large companies such as Enron, and World Com, due to errors in financial reporting and committing overt acts of financial fraud. As technology increases and the world becomes more reliant on financial data for global interaction then there is a greater risk for financial fraud to be present.
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