PLEASE LET ME KNOW THE NAMES OF THE COMPANIES BEFORE WRITING
Watch this video, which provides examples of companies that have been guilty of ethics-based malfeasance related to financial management.
Sarbanes-Oxley (3 minutes, 5 seconds) from the LinkedIn Learning course, Securing the IoT: Privacy.
https://www.linkedin.com/learning/securing-the-iot-privacy/sarbanes-oxley?autoplay=true&u=57878161
If you cant watch the video, here is the transcriipt:
– [Instructor] US lawmakers created the 2000s Sarbanes-Oxley Act, or SOX, in response to a number of corporate accounting scandals occurring between the years 2000 and 2002. Let’s take a look. I’m at this website here where we can see the 10 worst corporate accounting scandals of all times. In 1998, Waste Management reported 1.7 billion dollars in fake earnings. In 2002, Worldcom inflated assets by as much as 11 billion. In 2002, Tyco’s CEO stole 150 million, and then also inflated company income by 500 million. In 2003, Healthsouth inflated estimated earnings by 1.4 billion. And in 2003, Freddie Mac misstated five billion in earnings. Although all scandals were significant, in the early 2000s, Enron was a large financially sound Texas-based company, and was involved in a number of energy-related ventures, such as oil refineries and power plants. Enron committed a number of different crimes, along with fraudulent reporting that were extensive and ongoing. Shareholders eventually lost 74 billion dollars. The Enron scandal pushed the American public and Congress to recognize the need for new compliance standards for public accounting and auditing. SOX affects public accounting firms, corporate management, and corporate boards of directors. The main concerns of US SOX are to reduce the amount of corporate fraud, protect investors, and improve the accuracy and reliability of a company’s financial stability. Although SOX has many sections, section 301 and 404 indirectly deal with information assurance and data integrity. All companies must monitor and manage all data and financial transactions and provide an annual report on what internal controls are in place, along with the effectiveness of the controls. Financial reports must be accurate and complete with no evidence of unauthorized transactions or data manipulation. SOX specifies methods to create and sustain security controls and procedures, and conduct a yearly audit to reduce corporate fraud and protect investors.
answer the following:
Examine ethical behavior within firms in relation to financial management. Provide two examples of companies that have been guilty of ethics-based action related to financial management. Explain how the incidents affected the company, the economy, and society.
