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Accounting and Audit Enforcement

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- Evaluate the level of SOX regulations that applies to for-profit and not-for-profit health care organizations, indicating whether or not mandating SOX requirements for non-profits might reduce fraud and increase corporate governance. Provide support for your rationale.

- Determine whether SOX has been effective in regulating ethical behavior of for-profit health care organizations. Defend your position.

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SOX applies to publicly traded for-profit companies, regardless of the industry type. All publicly traded companies must comply with SOX, or they face the applicable consequences as set forth by the PCAOB, and also often by the SEC and FASB. In terms of health care organizations, SOX has had a definite impact. SOX would definitely reduce fraud in all areas, including in non-profit organizations. SOX was enacted as a direct response to fraud that was taking place, so we would not expect to see an increase in fraud or a decrease in associated corporate governance due to the mandates. This would be the opposite effect of why SOX was created. The PCAOB works diligently to enforce SOX, and this includes in the area of health care.

Back in 2003, when SOX was ...

Solution Summary

This solution evaluates the level of SOX regulations that applies to non-profit organizations. A thorough discussion of relevant mandates and effectiveness is included.

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Standards, Reporting, and Enforcement

In need some help in answering these questions:
1) What is your opinion on the questions below?

FASB promulgates US GAAP (Generally Accepted Accounting Standards) and IASB creates IFRS (International Financial Reporting Standards). US GAAP is a rule-based system while IFRS are principle-based. The accounting standards only report on the financial dimension and stakeholders are demanding additional information. GRI (The Global Reporting Initiative) is one effort and standardizing reporting on multiple dimensions. In addition, SOX (Sarbanes-Oxley) was passed in 2002 as a response to numerous accounting scandals. Accounting does not exist in isolation, and changes in accounting rules and enforcement impact business organizations on a global basis.

References:
American Institute of Public Accountants (AICPA). (n.d.). Retrieved from http://www.aicpa.org/Pages/Default.aspx
Financial Accounting Standards Board (FASB). (n.d.). Retrieved from http://www.fasb.org/home
Financial Accounting Standards Board (FASB). (n.d.). Convergence with the International Accounting Standards Board. Retrieved from http://www.fasb.org/intl/convergence_iasb.shtml
Global Reporting Initiative (GRI). (n.d.). Retrieved from https://www.globalreporting.org/Pages/default.aspx
International Accounting Standards Board (IASB). (n.d.). Retrieved from http://www.ifrs.org/Home.htm
International Federation of Accountants (IFAC). (n.d.). Retrieved from http://www.ifac.org/
The Sarbanes-Oxey Act. (2002). A Guide to the Sarbanaes-Oxley Act. Retrieved from http://www.soxlaw.com/

Required: Below are some questions for discussion.
1. How widespread are IFRS and what do think will happen to US GAAP?
2. What is the difference between a rule-based and principle-based system?
3. Discuss the Global Reporting Initiative, its purpose, the standard setting process, the use of its reporting system, etc.
4. How has SOX affected business organizations and the accounting profession?

You do not need to discuss every organization mentioned above. Choose one or two relevant aspects for further investigation and share your knowledge with the class. Try to add information not previously discussed by others. Please, provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and Include references in APA format.

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