Impact of Sarbanes-Oxley Act 2002 an Example of the Topic Government and Law Essays by

Impact of Sarbanes-Oxley Act 2002 by Expert Tutor Maya | 20 Dec 2016 Sarbanes Oxley Act 2002 was enacted by the U.S. Government jointly sponsored by Democratic and Republican parties named after their senators Sarbanes and Oxley respectively echoing the sentiments of all stakeholders in the aftermath of big corporate frauds of Enron, Global Crossing and World com to name a few. As the corporate frauds were perpetrated with the connivance of auditors of the public limited companies, the act called SOX for short, has come down heavily up on the Auditors and Directors. This paper is aimed at briefly outlining of how SOX has changed corporate governance affecting auditors by changing the working of their firms, their audit practice and impacting their audit clients of publicly listed companies in the U.S. both U.S and non-U.S having their debt or equity securities registered with SEC under Securities Exchange Act of 1934. SOX establishes new provisions and changes existing law considerably. The enactment provides for an enhanced audit committee responsibi lity and auditor oversight, prior approval for non-audit services by the auditor, and disclosure of non-audit services of the auditor. Need essay sample on "Impact of Sarbanes-Oxley Act 2002" topic? We will write a custom essay sample specifically for you Proceed College Students Frequently Tell EssayLab specialists: How much do I have to pay someone to make my assignment today? Essay writer professionals suggest: Academic Papers For Sale English Essays For Sale Get Paid To Write Essays For Students Buy College Papers Online Writing Essay Company CEOs and CFOs have to certify the accuracy of their companies annual and quarterly reports without any misleading statements besides assuming responsibility for properly evaluated internal controls. A ban has been imposed on directors and executives to avail new personal loans from their companies except certain regular consumer loans. The Audit Committee Section 301 of SOX prohibits listing of security of any company with SEC that does not have an audit committee complying with the provisions therein. The audit committee members should be independent. The director who is the audit committee member is considered independent only if he has not received any direct or indirect compensation from the company or its subsidiaries other than as a director. He ca not also act as an affiliated person which means acting directly or indirectly through intermediaries. A safe harbor not being an executive officer of the company or a shareholder owning 10% or more shares with voting rights is not considered as controlling the company. This audit committee is responsible for hiring companys independent auditor and fixing their remuneration. This committee should oversee the auditors work involving preparation or issue of audit reports and related works and also sorting out differences between the management and the auditor in respect of financial reporting. If the audit committee has any financial expert who is independent as stipulated above, his/her name must be disclosed by the company. If there is no financial expert in the audit committee, reason must be furnished by the committee. The financial expert must have the following attributes. An understanding of GAAP and financial statements. The ability to assess the general application of such principles in the accounting for estimates, accruals, and reserves. Experience preparing, auditing, analyzing, or evaluating financial statements that present a complexity of accounting issues that is generally comparable in breadth and level to the complexity of issues that the companys financial statements can reasonably be expected to raise or experience actively supervising one or more persons engaged in such activities An understanding of internal control for financial reporting. An understanding of audit committee functions. The audit committee financial expert must also have acquired the required attributes through any of the following: Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, or auditor or person performing similar functions Experience overseeing or assessing the performance of companies or public accountants for the preparation, auditing, or evaluation of financial statements Other relevant experience. (Guy 2003) Section 302 of the Act dealing with corporate responsibility requires that periodic statutory financial reports should certify that signatories have reviewed the reports, that it does not include any material untrue statements, omissions or misleading statements, that financial statements fairly present prevailing financial condition and results in all material aspects and tat the signatories are in charge of internal controls evaluated in the previous 90 days. Deficiencies if any, in the internal control and information on fraud involving employees and changes in the internal controls having negative impact. ( soxclaw.com) Auditor Independence The auditor who conducts audit of the company as approved by the Audit committee shall not perform specified non-audit services concurrently. The auditors should be changed once in five years. There must be one year cooling-off time for an employee or employees of the audit firm to join the company they audited as CEO, CFO or Chief Accounting Officer. The corporate personnel are also prohibited from influencing, coercing, manipulating an accountant of the audit firm engaged in the audit of their company. All auditing firms engaged in auditing of listed companies should enlist with the newly formed Public Accounting Oversight Board wihin 180 days of the Board coming into being. Section 409 stipulates real time disclosure on a rapid and current basis. The disclosure relates to the following 11 items in Form 8K.. execution or termination of a material agreement not in the ordinary course of business; termination or reduction of a business relationship with a customer which constitutes a specified portion of revenues; creation of a direct or contingent material financial obligation; events triggering a direct or contingent material financial obligation (i.e., default or acceleration of an obligation); exit activities such as material write-offs and restructuring charges; any material impairment; any change in a rating agency decision, issuance of a credit watch or change in company outlook; movement of securities from one exchange or quotation system to another, delisting of securities, failure to comply with a listing standard; conclusion or notice that security holders should no longer rely on previously issued financial statements or audit report; and any material limitation regarding employee benefit, retirement or stock ownersh ip plans. (Orrick 2002) Material off-balance sheet items and dealings with unconsolidated entities or other persons must be also reported in all annual and quarterly reports having a bearing on current or future financial position of the company, changes in financial condition, results of operation, liquidity, capital expenditures , capital resources or significant components of revenues or expenses. (Orrick 2002) Punishments for violations of the Act Section 802 stipulates a maximum 20 years imprisonment for knowledge of alteration, destruction, mutilation, concealment, cover up or falsification of a record or document with an intention to defeat a federal investigation or influence a bankruptcy case with or without fines.. Section 904 of the Act increases the penalties for criminal violations of ERISA from up to $5,000 and/or one year in prison to up to $100,000 and/or ten years in prison. For other than natural persons, it increases the penalty from up to $100,000 to up to $500,000. Attempts and Conspiracies. Section 902 of the Act makes attempts and conspiracies to commit offences under the white collar criminal laws contained in the U.S. Code Under the same section there is a punishment of maximum 10 years with fines for knowing and wilful violation of a new audit working paper retention requirements. Section 1102 stipulates a maximum punishment of 20 years with fines for corrupt alteration, destruction, mutilation or concealment of a record or document in order to impair its integrity or availability for a proceeding. Section 807 of the Act creates an additional federal felony, subject to fines and/or up to 25 years imprisonment, for knowingly executing or attempting to execute a scheme or artifice to defraud a person in connection with any security of a public company; or to obtain by means of fraud any money or property in connection with the purchase or sale of any security of a public company. The Act also increase criminal penalties for several existing white collar crimes Increased Criminal Penalties Under the Exchange Act. Section 1106 of the Act increases the penalty for wilful violations of the Exchange Act from up to $1 million and/or ten years in prison to up to $5 million and/or 20 years in prison. For other than natural persons, it increases the penalty from up to $2.5 million to up to $25 million Mail and Wire Fraud. Section 903 of the Act increases the maximum prison terms of mail and wire fraud from five to 20 years (Orrick.2002) Conclusion As seen above, the stipulations are of high standard and are punishments are exemplary that Sarbanes-Oxley Act has been a trend setter in the accounting world. In Australia similar enactment called CLERP 9 has also followed suit. Though critics say that advantages of the new provisions are lesser than the damages it is causing to the auditing and accounting profession, it is hoped that in due course of time, these damages will disappear and auditing profession will rise like a phoenix. Reeferences Lander p, Guy. What Is Sarbanes-Oxley?. Blacklick, OH, USA: McGraw-Hill Trade, 2003 http://site.ebrary.com/lib/britishcouncilonline/Doc?id=10065195&ppg=73 Orrick 2002 Securities Law Update August 2002 Soxlaw.com http://www.soxlaw.com/index.htm> retrieved April 4, 2007

Great Barrier Reef management and protection Essay Example

Great Barrier Reef management and protection Essay Example Great Barrier Reef management and protection Essay Great Barrier Reef management and protection Essay The Great Barrier Reef Is an extensive and Intricate ecosystem which Is located off the east coast of Northern Queensland. The GAB stretches roughly 2300 kilometers from as far north as Fly River in PANG to as far south as Frazer Island. The whole reef system covers 354, 000 square kilometers in total which makes it the largest and most famous coral reef system in the world. Holding one of the worlds broadest ranges of genetic biodiversity, the maintenance of the GAB is vital. Reasons for the conservation of the reef include economic value, importance as a reservoir for illogical diversity, it is the largest reef system in the world, it is used for education and research into revolutionary processes, it plays an important role in the carbon cycle, chemicals can be removed for use in medicine and the GAB also prevents coastal erosion. Over time, reef management strategies have been introduced to help with the preservation and conservation of the reef, these strategies Include traditional and contemporary management. Traditional management was when the Aboriginal people had complete control over the land, the Indigenous peoples management included great admiration for the land, treating it with respect and sing only justifiable amounts of food and materials. This was a sustainable and successful management strategy used to conserve and preserve the GAB. : Contemporary management included reef exploitation, UN-sustainable usage of materials, disregard for pollution and UN-policed fishing which led the GAB to be at NSA (GENETIC DIVERSITY, UTILITY VALUE, INTRINSIC VALUE AND HERITAGE VALUE AS ALL REASONS FOR THE PROTECTION OF THE GAB) Traditional management of the GAB boats superiority and success (BACK UP). Traditional management strategies portrayed knowledge about the ecosystem harbored by the Indigenous people; they understood the significant of the ecosystem, the need for sustainability and the reasons for preservation. The Indigenous people trusted the reef to provide food, building materials, medicine and of course beauty, however, the way In which these needs were harvested from the reef was gentle so that there was no exploitation and no UN?sustainable activity. Being that there are more than 35 separate groups of Aboriginal and Tortes Strait Islander people with links to the land surrounding the GAB, tribes did not exist on only one area of the land for their life but instead moved around so that the land was not overused in sections. The traditional management strategies used and enforced by the indigenous people were extremely successful in preserving the reef. They were able to live off the land without exploiting and without disturbing the dynamic equilibrium that exists on the GAB. The indigenous people are able to focus their management important factors such as stewardship and conservation of resources for future generation. Aboriginal and Tortes Strait Islander people feel an accountability to look after the land on which they exist because of 2 million years of deep spiritual connections and links between the two. Stress on the technology meaning that the traditional management strategies were very effective in preserving the land. The GAB has altered and varied over many years, meaning that the management required has changed too. Contemporary management has been adjusted to suit the ever-changing needs of the GAB to aid in preserving, conserving and protecting the delicate ecosystem. Supporting the contemporary management practices include establishing, in 1975, the largest URINE Park in the world, World Heritage listing in 1981, broad scientific research and pressure from all parties effected. The SPAM had an act put in place by the federal government to assist in the management of the reef. To enable the reef to be properly managed, state and federal government agencies are involved in GAB management, these include Australian Marine Safety Authority, Queensland Department of Transport, Queensland Parks and Wildlife Service and The Aboriginal and Tortes Strait Islander Commission. All of the government agencies involved follow four principals; Management at the ecosystem level to achieve overall protection of the ecosystem, Conservation and reasonable use so that the ecosystem provides opportunities for sustainable use and enjoyment of its resources while being protected, Public participation and community involvement in the development and implementation of management, Monitoring and performance evaluation of management. In 2004 the Marine Park Authority introduced zoning to help manage the reef. Buffer zones were introduced for people to appreciate and enjoy areas of the reef without disturbing the national park zones. Conservation park zones are to allow small-scale recreational fishing. Estuarine conservation zones allow recreational activities such as snorkeling and diving. General usage zones allow a diverse range of recreational and commercial activities such as tourist boats. Habitat park zones allow a varied array of recreational and commercial activities. National park zones allow the public to appreciate and enjoy the beauty of the nature around them, being classified as high conservation value. Preservation zones forbid any public access to a totally protected high conservation value area of the marine park. The Great Barrier Reef Outlook Report 2009 identified climate change as one of the greatest threats to the long-term health of the Great Barrier Reef, including; ocean acidification, rising sea enraptures, rising sea level and the increased frequency of severe weather events. There is also expected to be flow-on impacts for communities and industries which is why the Great Barrier Reef Climate Change Adaptation Strategy and Action Plan 2012-2017 was created. It outlines how we will build Great Barrier Reefs health so its better able to cope with stress and avoid climate change impacts. Climate change has increased sea surface temperature, if this increase continues the temperature will exceed that of which the coral has the ability to grow which results in the leaching of copious amounts of coral, for example, in 1998, there was a global mass bleaching event where 50 per cent of the reefs on the Great Barrier Reef suffered bleaching. During this time, sea temperatures on the Great Barrier Reef were the highest ever recorded. From alterations in the temperature of the sea the water movement is affected causing vast ocean currents that act as a nutrients recycling cycle. This can be enough for the elimination of the reef. Climate change is not solely negative but is one of the most important roles of the reef. Green-house gases maintains the health and growth of the coral, without which the corals would not be able to survive. Seal level rise will impact negatively on the reef as the penetration of sunlight becomes less effective because the distance of that energy has to travel to reach the coral will be further. Being the largest and most beautiful reef system in the world the GAB attracts about 2 million tourists each year meaning that the activities carried out are examined very carefully. Tourism is a vital method in educating people about this delicate ecosystem. Through education the SPAM are blew to encourage conservation and preservation and influence people on the importance of the ecosystem. One aim set in place by the World Heritage Convention is to promote education concerning environmental protection as well as the influence of human activities on ecosystems. This will promote vigilance and care when visiting fragile reefs. Having 85% of the total number of tourists visiting the reef yearly only use 7% of the reef clashes with the importance the Indigenous people placed on not using too much of the one area but moving around. Without following the living quinine employed by the Indigenous people we are in danger of disturbing the reef and the aquaculture of the reef. We are also in danger of disturbing the water quality of the reef as the increased use of nutrients, pesticides and other pollutants on the land are ending up in the water. Also because The Great Barrier Reef receives the run-off from 38 major catchments, discharges are the single biggest source of nutrients to the inshore areas of the Great Barrier Reef World Heritage Area. This is seen as the second most significant pressure on the GAB. Coastal ecosystems play a vital role for the Great Barrier Reef. Extensive areas of habitats that support the Great Barrier Reef ecosystem have been in filled, modified or cleared. This loss of coastal habitats is concerning as they are important feeding and breeding grounds for marine species and sediments traps and nutrient filters for water entering the Great Barrier Reef. The Great Barrier Reef Marine Park Authority (SPAM) is a partner in the Australian and Queensland governments commitment to the Reef Water Quality Protection Plan (Reef Plan). This plan aims to stop and reverse the decline in the quality of water flowing into the Great Barrier Reef. The SPAM prepared Water Quality Guidelines for the Great Barrier Reef Marine Park which recognize trigger levels for managers to take action if conditions surpass them The development of traditional and contemporary management strategies over past years has been evident. Sustainable practices engaged in by both the Indigenous people and Marine park zoning set up by the SPAM are both strategies to be used as they ensure a strong, sustainable and healthy ecosystem for generations to come. The techniques practiced by the Indigenous Australians centered on the important value of stewardship. The management strategies utilized by the Indigenous peoples proved successful and sustainable, as the tenuous and delicate reef has survived. A combination of contemporary and traditional strategies has been employed by the SPAM, enabling them to protect the reef ecosystem. Education of tourists on the vulnerability of the ecosystem, scientific research into the possibilities the reef has to offer and learning about how to care for this vital ecosystem are all factors showing the effectiveness of the SPAM management, conserving the GAB is very important, as it possesses resources that can be used in vast areas and also provides a habitat the privilege of visiting it.

International Business- Airbus versus Boeing - When is Intervention Essay

International Business- Airbus versus Boeing - When is Intervention Not Intervention - Essay Example or any public body are prohibited. Again according to Article III: 4 of GATT 1994, certain favourable taxation policies are prohibited. (PÃ ©rez A. F., January 2008). Despite SCM agreements under WTO, there have been innumerable cases of dispute of violation of these agreements (DISPUTE SETTLEMENT, January2009). All major trading & industrial countries and regions, namely US, EU, Brazil, China, India, etc have got into these imbroglios. Protectionist tendencies are evident in actions of various governments of the world, though sometimes it is done in the garb of ‘saving jobs’ or promoting ‘home grown companies’. A recent report by the World Bank specifies rising protectionist tendencies in 17 out of the 20 ‘G20’ nations. In the era of ‘Open trade’, the report mentions: These do not bode well for ‘Open Trade’, liberalization or the WTO. Economists predict that due to prevailing recession in the world economy, these tendencies would rise all across the globe & many governments might find it hard to follow the liberalized trade policies. ‘Trade without discrimination’ the general philosophy underlying WTO, is being distorted by these nations. During the 2nd world war, Boeing had received many lucrative contracts from the US Department of Defense. By the 1960s Boeing was a leading aircraft manufacturer of the world. By 1970 some European countries in order to challenge Boeing’s dominance put in ‘massive Govt. subsidies’ to form Airbus. After a period Spain & Britain joined with the founding member countries (of Airbus) France & Germany. Airbus received billions of dollars as soft loans and subsidies from these countries and also from EU. Ultimately for the first time in early 2000s, Airbus was able to surpass Boeing to become the world’s leading commercial Jet manufacturer, with greater annual sales revenue.