Sox/Dodd Frank/Jobs Act

In: Business and Management

Submitted By ww23hk
Words 644
Pages 3
Repeal
It is logical to believe that Sarbanes Oxley Act, Dodd Frank Act and JOBS Act exists for a reason. Although politic is a very complicated topic and has some sort of influence in establishing a new federal law, SOX, Dodd Frank Act and JOBS Act are reasonably justifiable. After WorldCom and Enron incidents, Sarbanes Oxley Act was established to regulate auditors and public company. After Late 2000’s mortgage crisis and others, Dodd-Frank and JOBS Act was established to regulate financial industry under federal government. Federal regulation seems like always came after a big crisis or downfalls to fix the issue and hopefully prevent future reoccurrence. However, federal government looked like a little bit too reactive because the regulations were always enacted after something bad happened. To make the matter worse, there is no way to proactively prevent any or all frauds or misconducts from happening due to their variety of types.
In order to discuss should Sarbanes Oxley, Dodd Frank and JOBS Act be repealed, let’s look into each Act individually and in a more detail sense, In Sarbanes Oxley, some of the important aspects that SOX 2002 deals with are auditor independence and enhanced financial disclosures. It also established Public Company Accounting Oversight Broad (PCAOB) to monitor and oversee public firm’s financial activities. Because there was lack of Audit regulations, it later leaded to the big Enron fraud. Therefore it was clear that something has to be done in order to provide a more sound regulation for auditors to comply with. If we look at since 2002, there are not many significant fraud discoveries, means SOX has been somewhat efficient, if not at all.
For Dodd Frank, according to Search Financial Security, the legislation aims to prevent another significant financial crisis by create new financial regulatory processes that enforce…...

Similar Documents

Act/561 Sox Act

...The Sarbanes-Oxley Act of 2002 Brandice Vasquez, University of Phoenix July 22, 2012 Linda Moore As businesses progress throughout the years, so must laws and regulations to ensure legal business practices remain ethical. Unfortunately, rules and regulations must be made because regrettable actions from large corporations are tainted with greed and power. Corporate Governance Within the past few years headlines have told distressing stories of unethical practices from large corporations such as Merrill Lynch, Enron, Martha Stewart, Adelphia, Boeing, Rite Aid, Xerox, and many more (Arjoon, 2013). According to Arjoon (2013), the definition of corporate governance, “is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders and spells out the rules and procedures for making decisions in corporate affairs. By doing this, it also provides the structure through which the company objectives are set and the means of attaining those objectives and monitoring performance.” The object of corporate governance is to ensure that a corporation is held to strict guidelines that promotes fairness, transparency and accountability, and that any action taking by a manager is of the interest of the major stakeholder groups. The......

Words: 976 - Pages: 4

Dodd-Frank Act

...by The Great Recession; either by losing their jobs or by the sudden stock sell off that occurred between 2008 and 2009. There was no question that something had to be done to prevent history from repeating itself. The only question was what to do. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), signed into law by President Barack Obama on July 21, 2010, was the proposed answer. The act was the work of Representative Barney Frank (D-MA), Chairman of the Financial Services Committee and Senator Chris Dodd (D-CT), Chairman of the Senate Banking Committee. The purpose of the legislation is “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail,” to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes” (The Dodd-Frank Wall Street Reform and Consumer Protection Act, 2012). While the law officially made it easier for whistleblowers to alert authorities to fraud, the law itself can be seen as unprogressive, rather than progressive, or forward thinking. According to the Association of Certified Fraud Examiners, fraud can cost an average company five percent of their annual revenues, which makes the detection of such fraud a priority for all stakeholders (Brink, Lowe & Victoravich, 2013). Prior to the Dodd-Frank Act, employees could only report instances of fraud...

Words: 1173 - Pages: 5

Sox Act

...Sarbanes-Oxley Act The Integrity of Financial Reporting Presented to Dr. Tarek Saleh By Abdelrahman Gabr Ayman El Marakby Hisham Moussa The Integrity of Financial Reporting The Gatekeepers (Guardians) are:       The The The The The The U.S. Securities & Exchange Commission (SEC) Public Company Accounting Oversight Board (PCAOB) Independent Audit Firm Audit Committee of the Corporate Board of Directors Internal Audit Function Internal Control System Corporate Governance & Financial Reporting U.S. Securities & Exchange Commission (SEC ) Public Company Accounting Oversight Board (PCAOB) Independent Audit Firm Corporate Board Of Directors Audit Committee CEO & CFO Internal Audit Function Internal Control System The U.S. Securities & Exchange Commission (SEC)     The mission of the SEC is to protect investors, maintain orderly and efficient financial markets, and facilitate capital formation. The laws and rules governing the securities industry derive from a straightforward concept: all investors, large or small, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. Therefore the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to judge for themselves whether to buy, sell, or hold a particular security. For more......

Words: 1076 - Pages: 5

Dodd Frank and Sox Act

...the Dodd-Frank and Sarbanes-Oxley Acts have to financial markets and what are the similarities or differences between these Acts. The Dodd-Frank Act was proposed by Representative Barney Frank (D-Mass.) in the House of Representatives and former Senator Chris Dodd (D-Conn.), Chairman of the Senate Banking Committee, in response to the financial and economic crisis witnessed from 2007-2010. Sarbanes-Oxley established heightened standards for the boards and management of both public companies and public accounting firms. The law was passed after the myriad scandals that rocked American securities markets, e.g., Enron, WorldCom, Tyco, and others. Sarbanes-Oxley is wide in scope, establishing numerous responsibilities on the part of corporate boards, with compliance closely monitored by the government.  While employees commonly discover fraud before other monitors, many are reluctant to report it. In an effort to encourage employees to report wrongdoing, Section 301 of the Sarbanes-Oxley Act of 2002 (SOX) requires audit committees of public companies to establish a reporting channel that allows employees to confidentially and anonymously submit claims involving questionable accounting or auditing matters. Despite these internal whistle blowing programs, there is still concern over employee willingness to report wrongdoing. Recently, the Securities and Exchange Commission (SEC) adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act.......

Words: 655 - Pages: 3

Jp Morgan and Dodd-Frank Act

...fail”. g) The fallacy that every risk can be quantified and managed led financial institutions into the trap and they started to lend and finance in ways that were unique and complex resulting in exposure risks that were least understood by them. h) The ever increasing financial innovations leading to severe competition among different types of financial institutions for the same buck also played a critical role as well as creating problems of moral hazard and ethics in general. 2. Do you think that the final cost of the government bailout was worth it? Do you think that the initial response was necessary to prevent a collapse of the financial system? Answer: According to the U.S. Department of the Treasury, 8.80 million jobs were lost and $19.2 Trillion were lost in household wealth. The estimated total potential exposure from the financial rescue was estimated to b $24 trillion by the Special Inspector General for TARP in July 2009. The IMF estimated cost of the U.S. response to be $1.90 trillion. If the government had not intervened then, the final cost of the financial crisis would have been much higher than this. The U.S. GDP grew over 2% on average as a result of the comprehensive response and prevented the economy from a total collapse. According to the U.S. Department of the Treasury, a total of $245 billion were disbursed to stabilize the financial institutions and the treasury recovered $264 billion including repayments of $230 billion and $34......

Words: 2780 - Pages: 12

Soxs and Dodd Pros and Cons

...Sarbanes-Oxley act and the Dodd-Frank act have attempted to reinforce and uphold the single most important virtue that our capitalist society so desperately depends on, trust. Many of the following names are familiar to us all by now, and for the wrong reasons: Enron, Lehman Brothers, World-Com, and Tyco. So what have SOX and DOD actually accomplished for our capitalist society? What can they actually do to help avert such catastrophic situations in the future? Let us begin with the Sarbanes-Oxley Act. Under the watchful eye of the Securities Exchange Commission the Sarbanes-Oxley act strives to protect the investing public from fraudulent and erroneous accounting practices, in addition to improving the accuracy of public financial statements. The act has transformed the world of accounting by: creating the PCAOB (Title I), increasing an auditor’s independence (Title II), increasing the responsibility/liability of a company’s senior management (Title III), enhanced financial statement disclosure requirements (Title IV), eliminating analyst conflicts of interest (Section V), increasing corporate and criminal fraud accountability (Section VIII), enhancing white–collar crime penalties (Title IX), increasing the responsibility/liability for corporate tax returns (Title X), and increasing the responsibility for corporate fraud and accountability (Title XI). There are several more provisions that comprise the act, but those mentioned are the “heavy hitters” of SOX. The......

Words: 3898 - Pages: 16

Dodd-Frank

...The Dodd-Frank Act is a legislation passed as a response to the financial crisis in 2008. It is intended to decrease various risks in the U.S. financial system. Some things it tried to create were the ability to grow jobs, protect consumers and prevent another financial crisis. It was made to restore faith in our financial system and to give Americans confidence that we will figure this crisis out and prevent another one the best we can. The act has established numerous new government agencies to oversee various components of the act. The Financial Stability Oversight Council is supposed to monitor the financial industry as a whole especially on Wall Street. They monitor how stable major firms are and their financial documents. They do this with major firms who if they fail, could have a major negative impact on our economy (companies deemed "too big to fail"). If any of these banks are considered to be too large and could possibly pose a systemic risk, the council has the right to break up the banks. The Financial Stability Oversight Council established the Volcker Rule which prohibits banks from owning or using hedge funds to increase profits. Next they made the The Consumer Financial Protection Bureau. The Consumer Financial Protection Bureau is in charge of credit and debit card companies and mortgage loans. This council is in place to make it easier for consumers to understand the regulations of mortgages. They make sure everyone is alert and clear of......

Words: 500 - Pages: 2

Dodd-Frank Act of 2010

...Intermediate Accounting I Professor Stubbs Topical Paper 2: Dodd-Frank Act of 2010 In 2008, when the financial crisis occurred, millions of Americans were left without jobs and trillions of dollars of wealth was lost wealth. To make sure the Great Recession would not happen again, President Barrack Obama put into effect the Dodd- Frank Act. With the help of this law, banks will not be able to take irresponsible risks that had negative effects on the American people. Furthermore, with the Volcker Rule embedded into the act, it will ensure that banks are no longer allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. The government will monitor banking activities through the use of the newly created Financial Stability Oversight Council that will work with the Office of Financial Research to use its resources and authority to investigate any it sees fit (CroweHorwath). Additionally, the act creates an instrument for government to shut down failing financially institutions without it creating a financial panic that leaves American taxpayers on the hook for the risky activities done by others. The act promotes market discipline that eliminates the expectation that the government will be there to bail them out in the situation where they fail. As it can be seen by the key provisions of the Dodd-Frank Act, its main purpose is to protect American families from......

Words: 1093 - Pages: 5

Dodd Frank

...Dodd-Frank Act and The Consumer Protection Agency. Finance 5000 Webster University Mr. Smith Patrick Overby Overby41@gmail.com/ 915-540-1267 Spring 2 2015 INTRODUCTION The Wall Street Reform and Consumer Protection Act or the Dodd-Frank Act was signed into law in 2010 due the financial collapse of the economy. It provided regulatory protection for the consumer and oversight on how banks issued loans. It provided a blueprint for how to approach to resolving the challenges that the financial markets can create. The framework of the law resembles The New Deal in the 1930s because of the Great Depression. The reforms implemented by the Dodd-Frank Act will have far-reaching effects on the financial system and our economy. The Dodd-Frank Act allows company stockholder to determine the type of compensation packages of that management receive. Businesses must create a committee to assess and decide the amount awarded to their leaders. There are myriad of viewpoints towards Dodd-Frank from the detractors and proponent of the law. Individuals who are against the law believe that it is inflexible and will hurt businesses. The supporters of the law understand that this will limit the power of the financial institution. Dodd-Frank Act In 2008, the country was going through one of the worst financial crisis in history that resembled the Great Depression of the 1930’s. It not only affected the U.S. but also threatened the total collapse of large financial......

Words: 2743 - Pages: 11

Sox Act

...officials when those rewards had not been endorsed by Playboy's Board. A jury concurred and found that Playboy unlawfully struck back against Zulfer by terminating her for her secured reports under SOX furthermore fired her, violating public policy under California law. The jury recompensed $6 million in unspecified harms with no designation between the SOX claim and the California wrongful termination claim. 2. Decide whether or not the whistleblower was justified in reporting the company’s actions. Provide a rationale for your response. I believe that Ms. Catherine Zulfer, who trusted all bonuses and rewards must be affirmed by the board of directors, blew the whistle on company CFO Pachler's alleged scheme to the Securities and Exchange Commission and Playboy's investors and shareholders. Also Ms. Zulfer states in her claim that she was to a great degree worried that CFO Pachler and CEO Scott Flanders were endeavoring to viably steal, take or change over Playboy assets which she believed Pachler's solicitations was "untrustworthy to shareholders." After she reported those shames, she was on New Year's Eve 2011, a demonstration she calls only a "guise for what really was countering" against her. 3. Examine the extent to which the whistleblower would be protected under the Sarbanes-Oxley Act. Justify your response. According to the report of UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CASE NO. CV 12-08263-MMM, Catherine Zulfer was employed by Playboy......

Words: 481 - Pages: 2

Dodd Frank

...Dodd-Frank Act: Did it Work? Introduction “With the President’s signature, the [Dodd-Frank Act] will mark the greatest legislative change to financial supervision since the 1930s,” according to Margaret Tahyar, partner and member of the New York Financial Institutions Group (Tahyar). Officially signed by Barack Obama on July 21, 2010, the Dodd-Frank Act gave positive hope for the future for financial markets and institutions, being viewed as the “most comprehensive financial reform since the Glass-Steagall Act” (Amadeo). However, since the implementation of the bill, various differing opinions on whether the passing of the act has truly helped or hindered the overall financial economy have prevailed. Dodd-Frank Act Overview Officially signed as the Dodd-Frank Wall Street Reform and Consumer Protection Act, the bill was implemented to change and supervise all financial institutions. More commonly referred to as the Dodd-Frank Act, named after the two legislators who proposed it, Senator Chris Dodd and Congressman Barney Frank, the act was created in result of the Great Recession of 2008 and to rein in large Wall Street companies that contributed to the crisis in order to prevent future devastations (Peirce, Robinson and Stratmann). As of 2014, only a third of the nearly 400 required rules had been finalized and only one third had been proposed (Culp). Kimber Amadeo, a US Economy Expert, provides the eight major regulation changes that were brought about from......

Words: 1189 - Pages: 5

Dodd Frank Act

...Dodd-Frank Act: Did it Work? Introduction “With the President’s signature, the [Dodd-Frank Act] will mark the greatest legislative change to financial supervision since the 1930s,” according to Margaret Tahyar, partner and member of the New York Financial Institutions Group (Tahyar). Officially signed by Barack Obama on July 21, 2010, the Dodd-Frank Act gave positive hope for the future for financial markets and institutions, being viewed as the “most comprehensive financial reform since the Glass-Steagall Act” (Amadeo). However, since the implementation of the bill, various differing opinions on whether the passing of the act has truly helped or hindered the overall financial economy have prevailed. Dodd-Frank Act Overview Officially signed as the Dodd-Frank Wall Street Reform and Consumer Protection Act, the bill was implemented to change and supervise all financial institutions. More commonly referred to as the Dodd-Frank Act, named after the two legislators who proposed it, Senator Chris Dodd and Congressman Barney Frank, the act was created in result of the Great Recession of 2008 and to rein in large Wall Street companies that contributed to the crisis in order to prevent future devastations (Peirce, Robinson and Stratmann). As of 2014, only a third of the nearly 400 required rules had been finalized and only one third had been proposed (Culp). Kimber Amadeo, a US Economy Expert, provides the eight major regulation changes that were brought about from the......

Words: 1415 - Pages: 6

Sox Act of 2002

...SOX Act of 2002 ACC/561 UOP SOX Act of 2002 On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession. (Securities Exchange Commission, 2014) Over the years, there have been multiple fraud cases involving businesses’ accounting practices. Some of the motives range from misleading potential investors about the company’s earning to attract more investors and get more funding from banks to corporate executives taking a little more cash home in salaries, plus avoiding taxes to increase profits. The SEC was created to enforce statutes such as the Sarbanes-Oxley Act and others to try to prevent the massive amount of fraud that has been on the rise. Even after all these measures have been put forward, more than half of U.S. organizations that experienced fraud in the past two years reported an increase in the number of occurrences, according to a new survey by PricewaterhouseCoopers that also found a rise in accounting fraud, bribery and corruption, with cybercrime moving to the forefront of U.S. companies’ concerns. (Cohn, 2014) One of the...

Words: 1483 - Pages: 6

Dodd Frank

...11-8-2011 Financial Markets & Inst Dodd-Frank Assignment The Dodd Frank Act has been created as a regulatory reaction from the recent financial crisis. The magnitude of its implications and provisions has not been seen since the great depression and will be conducted as a major overhaul to the financial systems rules. Financial regulation within a system that clearly had ulterior motives and lacked market discipline is inevitable. Without clear transparency of what and how borrowers are investing individuals savings will surely lead to moral hazard and conflicting interests. With Dodd Frank hopefully some of this asymmetric information will be largely more apparent to an inspecting investor. This Act aims to promote the financial stability of the United States financial system by implementing rules and regulations to improve accountability and transparency. Dodd Frank mainly addresses issues dealing with ending the "too big to fail" banks, protecting the American taxpayer by ending bailouts, ensuring consumers safety from abusive financial services practices, and for other related purposes. The legislation gives the government more power to step in and "unwind" financial firms that are failing, enables more oversight of the derivatives market, and to protect the individual investor (Bentley). Thanks to Dodd-Frank, we will see whistleblowers offered incentives for reporting compliance violations to a larger and more powerful SEC. The SEC will also have the power to......

Words: 1288 - Pages: 6

The Sox Act

...The SOX Act The SOX Act Paul Sarbanes a senator and a Representative Michael Oxley in 2002 created the Sarbanes-Oxley Act, also known as the SOX Act. These people drafted this act to protect public companies by regulating the truthfulness along with the consistency of financial accounts. The SOX Act put in place new rules and laws for corporate accountability as well as new penalties. It changed how corporate boards and executives interacted with these auditors. It eliminated the excuses from chief executive officers and chief financial officers. Instead it held them liable for the correctness of financial statements. The SOX Act specifies new financial reporting responsibilities, including accuracy regarding new in-house controls and measures designed to ensure the reliability of their financial records. The SOX Act requires financial reports to include an internal control report. It is designed to show that not only are the company's financial data correct but also the company has confidence in them because satisfactory controls are in place to protect financial data. Financial reports must contain an evaluation of the success of the internal controls. The auditing firms are required to confirm to that assessment. The auditing firm does this after reviewing controls, policies, and procedures during a Section 4040 audit, conducted along with an established financial audit. Roles that ethics plays in business today with the SOX Act......

Words: 726 - Pages: 3