Excello

The Enron and WorldCom scandals were arguably the incidents that permanently changed the procedures for accounting controls. In response to these incidents, the Sarbanes-Oxley Act (SOX) of 2002 was passed. Once the knowledge of these scandals was made public, a number of subsequent accounting scandals were discovered in public companies such as Tyco International, HealthSouth, and American Insurance Group. In addition, a then-employee-owned company, Post, Buckley, Schuh & Jernigan, Inc. (dba PBS&J, now known as “Atkins North America, Inc.”), was also hit by a similar accounting scandal. Henceforth, a case study of PBS&J is presented where we will examine the fraudulent transactions that

breach of duty of loyalty, and unfair competition. It is being argued by Schwab that Castro could

The auditing firm Coopers & Lybrand was accused of failing to perform a proper GAAS audit. One strategy the auditors could have performed was to follow the trail of revenue vs expenses. The auditor should have notice large sums ($10 million) of revenue going into one particular expense (Suppliers/Inventory). Considering Phar-Mor filed that they lost money in fiscal year 1984 and 1985 and they never cleared

It will be given another company. It may be the ethical one but somebody will pay this money and this one will get the deal.

Financial reporting in the recent years through the SEC mandates has become one of the most important aspects to corporate management. Stamford International's problem is inherent in the discrepancy in reporting system and accounting irregularities from the various aspects of the business. Not only has this but Stamford, due to rapid growth not been able to accommodate for the expansionary activities like acquisitions of units and international transactions. The result has been the experience of loss in earnings-per-share. In the following analysis, the researcher thus will outline some of the problems that Stamford should address and resolve accordingly to be able to post a positive quarterly report and remain compliant with the

4. Currently management has two problems on their hands. The first and most pressing is the fact that they have to issue a restatement of previous years’ financial statements due to accounting errors associated with premature revenue recognition. The second problem, which may have contributed to the first problem, is the fact that the company’s revenue streams are drastically changing and they hope that they continue to evolve into lifetime revenue streams, which unfortunately defer revenue significantly. This change in revenue streams and the associated recognition of that revenue, at the appropriate time, has caused INVESTools the issue of having to make the restatement. Since both issues need to be addressed and can be at the same time, it might be in the company’s best interest to do so simultaneously. The company historically chose not to capitalize most expenses that could have been capitalized under SAB 104 since their business didn’t rely on many deferred revenue streams at the time. The company would have undoubtedly preferred to change their policy for expensing deferred-revenue contracts were it not for the SEC’s preference that such costs were treated consistently and for the additional fact that they would have to make their case to the SEC, gain their approval, and restate all previous year’s financial statements. Now that the company is facing having to restate past financial statements, they might as well approach

Firstly there is a significant Ethical and morale lapse in a share floated company when the CEO engages in related party transactions. The moral issues arise

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

ate its earnings since that transaction was considered by Enron as a sale, and not

This is not in compliance with the provisions of GAAP or SAB 101. Revenue should not be recognized until it is realized or becomes realizable and earned. If we followed this statement the company did not have realized revenue Furthermore, the penalty payments if enforced could not be paid till the year 2005 as stated in the contract. Also, the journal entry resulted in recognizing revenue when it was not earned or

Issue 2: Has Patricia breached her duty to act in good faith in the best interests of the company when advising her sister Faye, that SEPL were buying a large amount of shares in FPPL?

The situation began to unfold when the Securities and Exchange Commission was probing into a restatement of the company's stock price. Kozlowski's business practices raised some eyebrows. In 1999, the Securities and Exchange Commission (SEC) initiated an inquiry into Tyco's practices that resulted in a restatement of the company's earnings. In January, 2002, questionable accounting practices came to light. Tyco had forgiven a $19 million, no-interest loan to Kozlowski in 1998 and had paid the CEO's income taxes on the loan. It was found that he company's stock price had been overrated, and that the CEO and CFO had sold 100 million dollars' worth of shares, and then stated to the public that he was holding them, which was a misrepresentation and misled the investors.

First and foremost, the accounting system used should be updated. The case stated that the system was 30 years old and that prior accounting period transactions could not be locked down, which enabled internal control processes to be bypassed. Enhancing internal

overestimate the fair value of the leased asset. If the given book value of the leased asset, its fair value is greater, then the recognized sales profits with inception of the lease period will be greater. “The commission alleged that Xerox management accelerated the revenue recognition of leasing equipment over a four-year period by more than $3 billion, and inflated pre-tax earnings by $1.5 billion, to meet or exceed Wall Street expectations and hide its true operating performance.” 2. Manipulation of various violation of reserve. This is the second greatest Xerox accounting fraud measure. In the U.S. capital markets, various

executives were accused of overstating revenue from software licenses in collusion with executives from PurchasePro Inc.AOL sold the software licenses for PurchasePro. The parties were accused of deceptive accounting practices that resulted in investors believing that the sales projections of PurchasePro had been met when they had not and the result was that the stock prices of PurchasePro were inflated and overstated by 37% in the first quarter of 2001. Out of court settlements were reached by AOL and executives including a $210 million fine in order to avoid being criminally and civilly prosecuted. The defendants in this case who did not accept plea agreements were found to be 'not guilty' and this is stated to be due to the lack of documentation of what had occurred on AOL's networking and computer systems.