<p class="MsoNormal" style="text-align: justify; line-height: normal; margin: 0in 0.5in 0pt;"><span style="font-family: "Times New Roman","serif"; color: black; font-size: 10pt; mso-themecolor: text1;">During this period of global markets, multinational corporations are demanding financial accounting standards with enhanced uniformity. In an effort to achieve this objective, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together on the Convergence Project, aiming to develop accounting standards that closely correlate with international financial reporting standards.<span style="mso-spacerun: yes;"> </span>In September 2006 and February 2007, the FASB issued two key fair value accounting (FVA) standards which focused on providing guidelines for fair value measurement (through a classification hierarchy), expanding disclosure requirements, and also allowing business entities to increase FVA’s application.<span style="mso-spacerun: yes;"> </span>However, the recent financial crisis has placed increased scrutiny on estimates derived under FVA.<span style="mso-spacerun: yes;"> </span>Consequently, a spotlight has been placed on the auditing profession, as the effectiveness of an auditor’s ability to test estimates derived under FVA has been questioned due to numerous firms approaching collapse in the midst of the credit crisis. <span style="mso-spacerun: yes;"> </span>Thus, the purpose of this paper is to present the challenges auditors face when auditing FV estimates, and to discuss the profession’s capability of adapting to FVA in the future.<span style="mso-spacerun: yes;"> </span></span></p>
<p class="MsoBodyText" style="text-align: justify; margin: 0in 0.5in 0pt; background: white;"><span style="font-style: normal; mso-bidi-font-size: 10.0pt; mso-bidi-font-style: italic;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">During the late 1990s and early 2000s, a plethora of corporate scandals occurred. Due to these corporate debacles, corporate executives have been placed under fire. In response to such unethical conduct with regard to internal practices and financial reporting, legislation has been passed in order to ensure that corporations conduct their business in an ethical manner. The purpose of this paper is to assess the connection between the Foreign Corrupt Practices Act of 1977 (FCPA) and the Sarbanes-Oxley Act of 2002 (SOx), to determine whether SOx has influenced the FCPA’s investigative violation activities by examining the number of such investigations since the passage SOx. This paper also addresses specific cases of violations of anti-corruption laws and compares SOx and the FCPA on violation penalties.</span></span></span></p>
In the post-Sarbanes-Oxley Act (SOx) world, there has been an unprecedented crackdown on fraudulent activity occurring within corporate America. During recent years, many companies have granted stock options to their executives and employees as part of compensation packages. While the issuance of stock options as a component of compensation is considered to be a legal practice, corruption has taken this corporate resource to unlawful heights. Recently, numerous corporations have been in the news for potentially backdating stock options. Accordingly, the purpose of this paper is to distinguish between legal and illegal aspects of backdating stock options, and to examine the ethics of such corporate activity.
<p class="MsoNormal" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: #0d0d0d; font-size: 10pt; mso-themecolor: text1; mso-themetint: 242;"><span style="font-family: Times New Roman;">The accounting industry is in a state of continuous change.<span style="mso-spacerun: yes;"> </span>In the United States, the historical cost principle has traditionally been the foundation of accounting.<span style="mso-spacerun: yes;"> </span>Until recently, assets and liabilities have been required to be recorded at their acquisition prices, with the exception of designated financial assets and financial liabilities.<span style="mso-spacerun: yes;"> </span>However, the Financial Accounting Standards Board (FASB) has now created accounting standards that are distant from the cost principle.<span style="mso-spacerun: yes;"> </span>Statement of Financial Accounting Standards No. 157: Fair Value Measurements, issued in September 2006 (FAS157, now codified as ASC 820) and Statement of Financial Accounting Standards No. 159: The Fair Value Option for Financial Assets and Financial Liabilities, created in February 2007 (FAS159, now ASC 825-10-25), significantly increases the viability of fair value accounting. The purpose of this paper is to illustrate the benefits and pitfalls of fair value and the corresponding affects on various stakeholders. <span style="mso-spacerun: yes;"> </span></span></span></p>
In the wake of corporate scandals occurring in the early 2000s, a need for stricter regulation was deemed necessary by the investors of U.S. public companies. In 2002, the Sarbanes-Oxley Act (SoX) was created. Accordingly, under the rules of SoX, U.S. corporations were faced with increased oversight and also needed to substantially improve their internal controls. As companies began to scrutinize their internal affairs more closely, some businesses detected other forms of criminal activity occurring internally, such as bribery. Those companies and individuals found to have committed bribery have violated the Foreign Corrupt Practices Act of 1977 (FCPA). Throughout this paper, a plausible correlation between SoX and a recent increase in reported violations of the FCPA will be assessed. This possibility is evaluated via a presentation of cases involving multinational corporations that have been found to have violated the FCPA. Based on the authors research, a pattern does exist between SoX and the enforcement of the FCPA. Finally, suggestions to modify the punishment for companies found guilty of committing bribery are also presented.
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