Sarbanes-Oxley Act, Section 301: Public Company Audit Committees, is created to address systemic and structural weaknesses that affecting the US capital markets due to failures of audit effectiveness and corporate financial responsibility that could potentially “threatened the reputation of those markets for integrity (Tsacoumis, S, Bess, S, and Sappington, A, 2003).” Section 301 provided appropriate regulatory authority of the audit committee the power to overseeing the accounting and financial reporting processes of the issues and financial reporting processes of the issuer and audits of the financial statements of the issuer (Public Law, 2002). Under SOX, audit committees shall be members of the board of directors of the issuer and must…
Lowe’s has a positive outlook when looking at the balance sheet and income statement. This is due to growing net profits coming from increasing revenue. This could be from increasing the number of stores, and the push to create more value for the customer. The debt to asset ratio has grown due to the expansion that has taken place in the fiscal year.…
When you start your own business, you aim a goal to be successful and gain capital, and revenues. In doing so, you have to comply with the rules and regulations of what’s like to operate a business. When it comes down to violating federal securities laws, there are consequences that includes criminal penalties. My case is about the misconduct of ethics and the consequences of what can happen if you fail to do what's right. Escott v BarChris Construction Corporation.…
What is Sears’ management trying to achieve through decisions with respect to financial reporting for uncollectible accounts? Management’s objective was to find alternatives to better manage the way credit card charges were collected. The new system that was being used allowed the company to charge off customers’ accounts that neglected to make a payment within eight billing cycles. The intention of the new system was to assist the company in better managing their collection efforts giving them the ability to identify accounts that could or would become delinquent earlier on.…
Rising debt liabilities have made increasing financial leverage. Lowe's has relied more on debt financing than low interest rates. In January 2016, the company's debt-to-total-capital ratio was 0.62 which is bigger than 0.53 in 2015 and 0.47 in 2014. Even though Lowe's has had rising financial leverage, it is still more financed by equity than its closest competitor, Home Depot, which had a debt-to-total-capital ratio of 0.77 as of January…
The reasons of the fraud are results from privileges that both Fannie Mae and Freddie Mac are granted from the U.S. Congress. They are government-sponsored enterprises which are chartered by the Congress, enjoy special privileges from the Federal Government such as exemption from federal and state income state, credit support from the U.S. Treasury; moreover, they are not subject to standard financial disclosures. Lack of effective and sufficient internal control is also another reason for this accounting fraud in 2003. The accounting scandal of Freddie Mac and Fannie Mae is strongly related to two of the three main points of the fraud triangle, which are opportunity and rationalization.…
Cost & Benefits of Sarbanes-Oxley Act There are many debates related to the cost and the benefits of the act. The supporters of this act claimed that it was absolutely essential and played a main role in rebuilding the public’s trust in the U.S. stock markets, and in strengthening the corporate accounting principles. On the other hand, the opponents argued that since SOX, the complex regulation, was enacted, U.S. financial service providers lost their competitive edge against foreign providers (Chan, Farrell, & Lee, 2008). The supporters of this act claimed that the benefits of SOX are greater than the cost and vice versa. Cost of Sarbanes-Oxley Act Sarbanes–Oxley has been criticized as a very expensive regulatory overreaction (Coates, 2007).…
Based on the interest inventory test, Shevaun has an interest in books relating to sports, family, friendship and jokes. I decided to use lexile.com to assist me with choosing books based on Shevaun’s interest and instructional reading level. According to the Lexile measures for his grade, Shevaun’s Lexile measure ranges between 360L and 720L. The results from lexile.com also shows that Shevaun can be instructed using the following books that will provide him with the most appropriate challenge to reach optimal level: Overall, the results of the assessments show that Shevaun needs to improve his fluency rate, comprehension skills and the identification of harder suffix bases and roots. Although he currently reads at his grade level, improvement in the above-mentioned areas can yield more positive results in his upcoming third-grade state assessment examination.…
The purpose of this paper is to define and explain the purpose behind The Dodd-Frank Wall Street Reform and Consumer Protection Act. “The Dodd-Frank Wall Street Reform and Consumer Protection Act is a United States federal law that places regulation of the financial industry in the hands of the government” (techtarget.com, 2017, para, 1). This paper aims to describe what led to the existence of Dodd-Frank, the protections and concerns it sought to address, and the exceptions where its limitations could be considered. The Dodd-Frank Wall Street Reform and Consumer Protection Act was created in response to The Great Recession. The financial regulatory system that was in place at the time was the principal cause that alluded to that financial…
Entering the adult world a few people have no clue what a credit score is until it is time to apply for a loan or they need to buy a new car. A credit score is the number lenders look at to approve and decline your application for credit. For example, when searching for a mortgage company to purchase a new home your credit must qualify before you are approved. Credit scores range from three - hundreds in the mid eight - hundreds. Many factors’ contribute to a low credit score, several you have control over and others you don’t.…
Investment bankers, regulators and Moody’s itself all share responsibility because of their actions. Investment bankers and Moody’s saw a government loophole with the promise of substantial monetary gain regardless of their actions being…
I loathe my student loan debt, but then again, no one likes their student loan debt! Some news broke this week that added a bit more understanding to some of the heartache I’ve experienced with my student loan provider. A major student loan company, Navient, is being sued by the Consumer Financial Protection Bureau. I am particularly interested in this (ok part of me is really excited to see them get theirs!)…
JPMorgan Chase is an American multinational bank and holding company. That provide the financial services to different sectors of the country. Headquarter of the bank in in New York City. This bank is the largest bank of United States that extends its operations in different cities of the state. By comparing its assets with the all the banks of the world, this ban ranks in 16th position.…
The biggest compensation and benefits issue at Lowe’s stems from the fact that North Carolina is an ‘Employment at will’ state. That means Lowe’s can terminate an employee without notice, for any reason, or for no reason. The only requirement is that the termination should not violate federal or state laws (Guerin, 2015). The company is not required to offer severance payments to terminated or laid off employees or assist them in finding alternative employment. Once an employees is terminated it is up to the employee to seek unemployment benefits from the state.…
Ian D Johnson Jb Henriksen Accounting 2600 11/1/17 Case Presentation: Enron Scandal Before the scandal that Enron is widely known for today, they were an up and coming American energy company led by CEO Kenneth Lay. In 1985, Lay helped to merge two natural gas companies known as Houston Natural gas and InterNorth to form Enron. Soon after, Congress approved legislation that deregulated the sale of natural gas, allowing companies to use the free market to sell energy. The company became a national middle man for the electricity for the newly deregulated states. This allowed Enron to sell energy at higher prices, increasing its revenue.…