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Acc/291

In: Business and Management

Submitted By cth725
Words 407
Pages 2
Thomas
Individual Paper
ACC/291
01/30/2013

My individual paper is going to focus on unethical accounting practices and how the Sarbanes-Oxley Act is used in today's world to try and limit companies from falsifying accounting statements.
One way that companies use unethical practices would be a practice known as cooking the books, this would involve a company falsifying information on their financial statements. There are numerous reasons why a company would do this but the number one reason that they do it is because they are having financial issues with their company and they don't want to go under or fill for bankruptcy or they are just doing it for greed.
One way that the government is trying to limit the use of such practices is passing Acts like the one U.S. Congress passed in 2002 called the Sarbanes-Oxley Act, this act mandated that there be stricter reforms on companies so that they can improve their financial disclosures, and preventing cooking the books and preventing accounting fraud. This Act was passed after all the early scandals in the late 1990's and early 2000's such as Enron. This act was named after their main architects, Senator Paul Sarbanes, and Representative Michael Oxley and it is used to deter and punish corporate and accounting fraud and corruption.
The Sarbanes-Oxley Act has eleven titles, that all have to do with the company remaining in compliance with the Act. Another way that companies use unethical practices would be embezzlement, this could be performed by an employee of the company or by anyone that has access to the companies accounts. Embezzlement is the withholding of assets for the main purpose of stealing those assets. It involves falsifying of records in order for the act to continue, sometimes the embezzler will withdrawal one lump sum, but some of the more successful embezzlers are the ones that take small…...

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