Question

Based on secondary research answer the following: 1. Explain in detail the background and all the events that led to the financial fraud. 2. Post and current business law in place. 3. Role of executives especially the CEO. 4. Sarbanes-Oxley Act and its legal reach (similar Act in Canada) 5. Importance of Transparency, Integrity and Accountability. 6. Measures in place to avoid similar frauds. 7. Personal viewpoints/comments - effective and corrective business law and remedies

answer 5th and 6th

Answer 1

answer-

5- Importance of transparency, integrity and accountability-

Transparency, integrity and accountability are very important because all these three principles helps an organization to have effective corporate governance. These three principles help organizations to reduce chances of having accounting frauds.

Transparency make sure that all the information of a public company is disclosed to all investors and public fairly. Transparency attracts more investors because companies which fake thier accounts and disclose information that is not true face issues like lack of investors, legal suits and out of business in no time.

Integrity means being honest and hold high moral values which helps organization to become a company of good image. Integrity helps organization in dealing with shareholders and stakeholders in fair and equitable manner.Integrity helps to build strong confidence in investors, customers, government and other stakholders in an organization.

Accountability is important because it helps the board members of a company to take responsibility of thier actions and manage company fairly. accountability create a fair balance of roles and responsibility in Top management.

2- The measures put in place to avoid similar accounting frauds are-

Use of accounting principles like generally accepted accounting principles (GAAP) which helps accountants to do accounting legally with set standards. Complying with these principles will reduce chances of accounting problems and misconduct.

Segregate Accounting Duties in which many public companies divide accounting and financial duties to different people instead of one person. This helps in cross referencing each other's action so that one person doing mistake or misconduct is caught by another.

Many companies are focused on knowing thier employees before giving them the job. They do cross referencing, background investigation so that employee's record can state everything.

Implement internal controls and regualr auditing. It helps companies to detect and prevent fraud before it happens. This includes restricting access to financial account data, establishing multi-person sign-off on expense reimbursements, all check writing functions, and other accounting or payroll functions, and performing an overview of audit logs to ensure the integrity of the books.

some other measures like Training to employees to prevent frauds, auditing of books regularly and protection of credit information.