English research proposal
Introduction Its fall of 2001 and you are an employee for Enron, one of the largest energy companies in the world at the time. As an employee you have the option of owning stock in it and you also have a retirement plan with Enron. But what you don’t know is that Enron has been committing accounting fraud for a while now and Enron’s stocks aren’t really worth $90 and that they are soon going to file for bankruptcy. The executives haven’t told you this because if they told you the truth, you would take your money out and they would lose all of their money. Instead what the executives will do is take all of their money out of the stocks just before it crashes and you will lose all of your money and retirement because you were unaware this was even happening. In October 2001 this is exactly what happened to 20,000 employees who worked for Enron. You may be thinking that this happened in 2001 and these things don’t occur anymore. My question is to ask how prevalent is accounting fraud and what can be done to stop it?
Investigation
In his article, How Bout the SOX, Derek Loosevelt hits a hot topic when talking about the consequences of the many scandals of the 2000s. Loosevelt brings up one of the most important repercussions, the possible jail time for fraudulent acts and, “A requirement that individual audit partners must be rotated at least once every five years…” (Loosevelt). Gary Giroux also shows the prevalence of accounting fraud by discussing “The Sarbanes-Oxley Act was passed in 2002 basically to eliminate future scandals.” (Giroux). Giroux also names “greed and hubris” as reoccurring themes in scandals. I began to research information on ways to stop accounting fraud. In his article, Financial Fraud-Accounting for Criminals, Kevin Voigt talks with many former criminals and gathers tips on ways to detect accounting fraud. Many of the criminals stated there are three elements to committing accounting fraud, “…Incentive, opportunity and rationalization.”
Investigation
In his article, How Bout the SOX, Derek Loosevelt hits a hot topic when talking about the consequences of the many scandals of the 2000s. Loosevelt brings up one of the most important repercussions, the possible jail time for fraudulent acts and, “A requirement that individual audit partners must be rotated at least once every five years…” (Loosevelt). Gary Giroux also shows the prevalence of accounting fraud by discussing “The Sarbanes-Oxley Act was passed in 2002 basically to eliminate future scandals.” (Giroux). Giroux also names “greed and hubris” as reoccurring themes in scandals. I began to research information on ways to stop accounting fraud. In his article, Financial Fraud-Accounting for Criminals, Kevin Voigt talks with many former criminals and gathers tips on ways to detect accounting fraud. Many of the criminals stated there are three elements to committing accounting fraud, “…Incentive, opportunity and rationalization.”