Transformations in the Corporate World related to Financial Reporting Procedures
(MBA level)
Contents
Agenda 3
Analysis 4
Guidelines from different Agencies 5
Introduction to COSO 13
Shortcomings 14
CSA Notice to show latest amendments 17
References 18
Agenda
Much in recent times quite a lot of noteworthy events have had a key impact on financial bookkeeping / accounting and reporting. These followed from the stock market boom in the late `90s and its collapse in early `00s. All through the fall down, share value of most of the firms, mainly those in the "hi-tech" industry fell sharply.
Several other, even more serious, failures of financial reporting have also come to light. The recent failures of and related to Nortel, Cisco, Enron, WorldCom, Tyco, Parmalat, Hollinger, Mutual Fund Industry have led to execution of responses such as U.S. Sarbanes-Oxley Act (2002) or "SOx" and Bill 198 and Multilateral Instrument 52-109 (2003) or "CSOx" in Canada.
Michael Oxley , U.S. Senator from Maryland.
Audit
Figure 1The penalties for a CEO and / or CFO for providing a forged official recognition of financial information under the Sarbanes-Oxley Act are substantial. It created a whole new environment of reporting.
Enron Corp. was a big US conglomerate with initial concern in natural gas distribution. Subsequent to significant deregulation of natural gas market in the United States during 1980s, Enron lucratively stretched out its operations to turn out to be an intermediary connecting natural gas producer and its consumers. Thereby it made possible to handle their exposures to variable natural gas prices. For example, it offered fixed-price long-term contracts to civic utilities and natural gas manufacturers. Consequently, Enron extended this business model to the range of other operating activities, together with steel, natural gas, electricity and weather futures. Its stock market performance was remarkable, going up to a high of about US$ 90 for each...