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The Sarbanes-Oxley Act and Corporate Governance - v10 (Course Id 1188)

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Author : Jae K. Shim, Ph.D., CPA
Course Length : Pages: 54 ||| Review Questions: 38 ||| Final Exam Questions: 30
CPE Credits : 6.0
IRS Credits : 0
Price : $53.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Accounting - Accounting for Course Id 1188

Description :

A corporate scandal involves alleged or actual unethical behavior by people acting within or on behalf of a corporation. Since the turn of the century, the U.S. has seen some large corporate collapses and scandals due to shoddy and deceptive accounting practices. Many companies, shareholders and employees suffered as stock prices fell and reputations were tarnished when businesses such as Nokia, Lucent Technologies, energy, and internet-related businesses conducted questionable practices.

This course examines developments in finance and accounting and a series of corporate accounting scandals on the heels of the Enron debacle that have led to current sweeping accounting guidelines, proposals, and legislation-most notably, the Sarbanes-Oxley (SOX) Act. Many of the issues surrounding the SOX Act-especially Section 404, Internal Control over Financial Reporting and Sections 302 and 906, Management Certifications -are discussed. The general issues on corporate governance and corporate social responsibility (CSR), including stock option expensing, are also covered. The illegal practice of stock option backdating is described as well.

Usage Rank : 0
Release : 2020
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 18-Jan-2021
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 1188

Keywords : Accounting, Sarbanes-Oxley, Act, Corporate, Governance, v10, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

After studying this course you will be able to:
    1. Recognize the sources of accounting irregularities such as the use of special purpose entities (SPEs) and improper revenue recognizion
    2. Identify the controversy with expensing stock options and specific issues addressed by ASC 718.
    3. Recognize different rules and regulations put out by the FASB, NYSE, and the SEC.
    4. Identify key elements of corporate governance.
    5. Identify attributes of good governance, social responsibility and other ethical standards.
    6. Recognize the major features of the Sarbanes-Oxley (SOX) Act of 2002 Corporate Responsibility Law.
Course Contents :

Chapter 1:   Points of Controversy

Course Learning Objectives

Types of Accounting Irregularities

Moving Debt off the Balance Sheet

Earnings "Management" and the Use of Pro Forma Results

Overstated Pension Plan Assumptions

Underreporting of Executive Compensation

Revenue Accounting

Expense Accounting

Channel Stuffing

Inappropriate Earnings Management Practices

Auditor Independence

Corporate Governance Issue

Characteristics and Trends of Financial Restatements

The Role of the Securities and Exchange Commission

Division of Enforcement

Division of Corporate Finance

Chapter 1 Review Questions

Chapter 2:    FASB, New York Stock Exchange and SEC Rules

Accounting for Stock-Based Compensation

Change in Approach to Equity Compensation

Arguments for and Against Stock Options Expensing

Stock Option Expense Approach


The Black-Scholes Model

Lattice-based Option Models

Stock Options Backdating

Illegal Practice

Alternatives to Stock Options

Restricted Stock Options

Stock Appreciation Rights

New York Stock Exchange and SEC Rules

The New York Stock Exchange’s Corporate Governance Rules

SEC Approved Rules to Address Analyst Conflicts

SEC Tightens Its Deadlines for Disclosure

The CFA Institute Research Objectivity Standards

1.0 Research Objectivity Policy

2.0 Public Appearances

3.0 Reasonable and Adequate Basis

4.0 Investment Banking

5.0 Research Analyst Compensation

6.0 Relationships with Subject Companies

7.0 Personal Investments and Trading

8.0 Timeliness of Research Reports and Recommendations

9.0 Compliance and Enforcement

10.0 Disclosure

11.0 Rating System

Chapter 2 Review Questions

Chapter 3:    The Sarbanes-Oxley Act

Enhanced Corporate Responsibility Law


The Highlights of the SOX Act

The Role of Public Company Accounting Oversight Board (PCAOB)

Key Requirements for Accounting Firms

Rules for Corporations, Their Officers and Board Members

Analyst Conflicts of Interest

Attorney Requirements

SOX Section 404

The Main Provisions


Internal Control over Financial Reporting

Responsibilities of Management and the Independent Auditor with Respect to Internal Control over Financial Reporting

The Role of Management

The Role of Independent Auditor

Material Weakness

Auditing Standard No. 2201

SOX Section 302 and Section 906 Considerations

Section 302 - Corporate Responsibility: Corporate Responsibility for Financial Reports

Section 906 - White-Collar Crime Penalty Enhancement: Corporate Responsibility for Financial Reports

Considerations for Sarbanes-Oxley Act Compliance

Cybersecurity Systems and Risk Reporting Act

Chapter 3 Review Questions

Chapter 4:    Corporate Governance and Other Ethical Standards

Good Governance

Corporate Governance

The Concept of Corporate Governance

Landmarks in Corporate Governance

Financial Literacy Training

SEC Restricts Mutual Funds' Broker Rewards

Mandatory Evaluation of Board Performance

Information Technology and Corporate Governance

Six Technologies That Can Assist with Compliance

Corporate Social Responsibility

Corporate Social Responsibility Best Practices

Business Ethics

Increased Concern for Business Ethics

Factors Lead to Unethical Behavior

Other Considerations

General Guides to Ethics

Simplified Criteria for Evaluating Ethical Behavior

Codes of Ethical Conduct

IMA’s Standards of Ethical Conduct for Accountants and Financial Professionals

IMA Statement of Ethical Professional Practice



Resolution of Ethical Conflict

Conflict of Interest

Legal Aspects of Social Responsibility

Chapter 4 Review Questions

Chapter 5:    The Key Sarbanes-Oxley Sections

Section 3: Commission Rules and Enforcement.

Section 101: Establishment; Board Membership.

Section 102: Registration with the Board

Section 103: Auditing, Quality Control, and Independence Standards and Rules.

Section 104: Inspections of Registered Public Accounting Firms.

Section 105: Investigations and Disciplinary Proceedings; Reporting of Sanctions.

Section 106: Foreign Public Accounting Firms.

Section 107(c): Commission Review of Disciplinary Action Taken By The Board.

Section 107(d): Censure of the Board and Other Sanctions.

Section 108: Accounting Standards.

Section 109(d): Funding; Annual Accounting Support Fee For The Board.

Section 201: Services outside the Scope of Practice of Auditors; Prohibited Activities.

Section 203: Audit Partner Rotation.

Section 204: Auditor Reports to Audit Committees.

Section 206: Conflicts of Interest.

Section 209: Consideration by Appropriate State Regulatory Authorities.

Section 301: Public Company Audit Committees.

Section 303: Improper Influence on Conduct of Audits

Section 305: Officer and Director Bars and Penalties; Equitable Relief.

Section 306: Insider Trades During Pension Fund Black-Out Periods Prohibited.

Section 401: Disclosures in Periodic Reports.

Section 402(a): Prohibition on Personal Loans to Executives.

Section 403: Disclosures of Transactions Involving Management and Principal Stockholders.

Section 407: Disclosure of Audit Committee Financial Expert.

Section 409: Real Time Disclosure.

Section 501: Treatment of Securities Analysts by Registered securities Associations.

Section 602(a): Appearance and Practice before the Commission.

Title VIII: Corporate and Criminal Fraud Accountability Act of 2002.

Title IX: White Collar Crime Penalty Enhancements

Section 1001: Sense of Congress Regarding Corporate Tax Returns

Section 1102: Tampering With a Record or Otherwise Impeding an Official Proceeding

Section 1103: Temporary Freeze Authority

Section 1105: SEC Authority to Prohibit Persons from Serving as Officers or Directors

Chapter 5 Review Questions


CPE Accounting Course: https://www.cpethink.com/qas-cpa-courses
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