Sarbanes-Oxley Act of 2002

 

G R OUP 2

 Y  E L  X O S E N A SARB AC T OF 2002  O M  C  D  L  O R  W

E NRO N

 

D e l  a S i f ran i 023001800032

TEAM MEMBER

Rukmayanti Lolo Munte 023001801034 S yi f a N ad ya S al s ab i l a 023001801092 M u t i a R as ya A z z ah ra 023001801148

 

 TABLE  T ABLE OF CONTENTS COMPANIES THAT

1 3

COMMIT FRAUD

 The company: company: Enron, Tyco

International, Adelphia, WorldCom

IMPACT OF SOX ON  THE  TH E ACC ACCOU OUNT NTIN ING G PROFESSION

2 4

EXPLANATION OF SARBANES OXLEY

APPLICATION OF SOX APPLICATION IN INDONESIA  The company: company: PT Telkomunikasi Telkomunikasi Indonesia, Tbk.

 

BLE OF   T  TA AN T  TE EN T  T  1 O C " companies that commit fraud" COMPANY

HOW THEY GOT CAUGHT?

WHAT WHA T HAPPENED? HAPP ENED? PENALTIES HOW THEY DID?

 

COMPANY BACKGROUND   ENRON SCANDAL

Houston, Texas

[2001]

an America energy, commodities, and service company

HOW THEY DID IT  Th ey kept ke pt huge hu ge de bt o th the e ba la nc e

•

CFO

CEO

Founder

sheet,

or

we

called

Mark-to-Market

Accounting is being able to recognize

WHAT HAPPENED

revenue when you have no revenue.  Th ey al so ma de a Spec Sp ec ia l Purp Pu rp os e

•

Entities which is the entity for this

Enron announced their lost of $ 600 million and Enron's assets shrank $ 1.2 billion. Shareholders lost $70 billions, thousands of employees and i n v e s t o r s l o s t a l l th t h e i r re re t i r e m e n t a c c o u n t s , many employees lost their jobs.

special purpose then submits a large amount of debt with Enron shares as

and •

the guarantor Arthur Andersen’s employees burn all the

balance

sheet

and

email

from

 

HOW THEY GOT CAUGHT

  ENRON SCANDAL

Mreodni’as sseheam p ri c s ravbaol uuet d En r eshsoul ds e si o ou ve and turned in by company whistleblower, Sherro on nW Wa atkins; high stock prices fuelled suspicious

[2001]

HOW THEY DID IT •

•

•

Lay died before serving time. Some m dci ak swahi d r tn l y a tet a e nt haactt uhael lh yahdeawhaesao 64 years old. Skilling got 24 years in prison. But some rumours said that he left prison in February in 2019 M a j o r A c c o u n t i n g Fi r m A r t h u r Andersen has been disbanded.

 

 TH  THE E UN UNDE DERL RLYI YING NG PR PROB OBLE LEMS MS OF ENRON LACK OF AUDITOR

QUESTIONABLE EXECUTIVE

INDEPENDENCE

COMPENSATION SCHEMES

LACK OF DIRECTOR INDEPENDENCE

INAPPROPRIATE  ACCO  AC COUN UN TI TING NG P RA RACT CTIC IC ES

 

COMPANY BACKGROUND Clinton, MISSISSIPI A Te l e c o m m u n i c a t i o n c o m p a n y

NDAL  WORLDCOM SCA

[2001] HOW THEY DID IT

CEO

 To h i d e i t s f a l l i n g p r o  t a b i l i t y , Wo r l d C o m i n  a t e d n e t i n c o m e a n d c a s h  o w b y r e c o r d i n g e x pe pe n s e s as investments.

WHAT HAPPENED

 THE PUNI NISH SHME MENT NT  TH E PU

By capitalizing expenses, it e x a g g e r a t e d p ro ro  t s b y a r o u n d $ 3 billion in 2001 and $797 million in

WorldCom CEO Bernard Ebbers was sentenced to 25 years in jail for his role in the scandal, and

Q1 2002, reporting a pro t of $1.4 billion instead of a net loss.

S u l l i v a n w a s s en en t e n c e d t o  v e years.

 

COMPANY BACKGROUND We s t W i n d s o r , N e w J e r s e y a securities system company

RNA TIONAL  T Y  YC CO IN T  TE E

[2002]

CFO

CEO

CLO

HOW THEY DID IT Dennis KaslowskiMark Swartz, Mark Belnickwere accused of giving themselves interest-free or very low interest loans this money was n e v e r a p p r o v e d b y Ty Ty c o ’ s b o a r d . T h e y w e r e a l s o a c c u s e d o f s e l l i n g their company stock without telling investors, which is a violation of SEC rules.

 

 TH  THE E PU PUNI NISH SHME MENT NT •

•

Court ordered Kozlowski to pay 70 m i l l i o n in in  n e s S w a arr t z 3 4  n e s Belnickhad to pay a 100.000 civil penalty

ONAL  T YCO IN TERNA TI

[2002]

HOW MUCH MONEY $170 million has taken from Tyco without proper approval form the compensation comiteeand shareholders Kowlozskiand Swartz also sold 7,5 million shares

$600 MILLION

o i nf vTeys ct oo r fso. r $ 4 3 0 m i l l i o n w i t h o u t i n f o r m i n g

 

COMPANY BACKGROUND

RA TIO ADELPHIA CORPO

Coudersport,Pennyslavania

[2002]

a cable television company

Founder

President & COO

EVP & CFO

WRONG DOINGS (1) hiding billions of dollars in debt (2) making up numbers (3) withdrew money from the company

 

WHAT HAPPENED March 27, 2002

issues began with footnote in a quarterly earnings statement  J u n e 2 0 0 2  

 l l e d f o r c h ap ap t e r 1 1 bankruptcy September 22, 2002  

RA TIO ADELPHIA CORPO

[2002] Used the company plane t o  y a Christmas tree to a

family member in New York city

Timothy and John ha d a

collection of 22 cars paid by Adelphia

 v e f o r m e r e x e c u ti ti v e s w e r e

 J o h n t o o k   1 m i l l i o n o f

charged with 24 counts of fraud

cash per month from the company

 

RA TIO ADELPHIA CORPO

 THE PUNI NISH SHME MENT NT  TH E PU

 J o h n r e c e i v e d a s e n t e n c e o f 1 5 y e a r s and Timothy received 20 years. John was released from prison in 2016 due to poor health

[2002]

 

SARBANES OXLEY ACT IN GENERAL

 

SOX’S HISTORY ESTABLISHED

 

INCREASE PUBLIC CONFIDENCE IN THE CAPITAL MARKET IMPLEMENT GOOD GOVERNANCE

PURPOSE OF SARBANES OXLEY 

PLACE A STRONGER EMPHASIS ON STRUCTURES AROUND THE BUSINESS WORLD TO PREVENT FRAUDAND MISCONDUCT IMPROVE AUDIT QUALITY  PROVIDES BETTER ACCOUNTABILITY ACCOUNT ABILITY BY MAKING MANAGEMENT AND DIRECTORS ACCOUNTABLE FOR FI NANCIAL ACCOUNTABLE STATEMENTS

 

Sarbanes Oxley consists of 11 title and 66 sections divided into all the titles:  Title I : Public Company Accounting Oversight Board  Title II : Auditor Audito r Independenc Independence e  Title III : Corporate Corpo rate Responsibility Responsib ility •

•

•

•

 Title IV  Title V

: Enhanc Enhanched hed Financial Disclosures D isclosures : Analyst Analy st Conict Con ict of Interest

 Title VI

: Commission Commissi on Resources and an d Authority Author ity

 Title VII

: Studies and Report

•

•

•

•

 Title VIII  Title IX

•

: Crimina Criminall and Fraud Accountabili Acco untability ty : White - Collar Colla r Crime Penalty Enhancements Enha ncements

 Title X

: Corporate Corpo rate Tax Tax Returns

 Title XI

: Corporate Corpo rate Fraud Accountabilit Accoun tability y

•

•

 

The Sarbanes-Oxley Act modernizes and reforms the supervision and regulation companiesof audit of public T H E CR E AT COMPAN AN Y ACCOUN T IN G A T ION OF A P UB L IC COMP OVE R SIGH T B OAR D (P CAOB ) AUDIT OR IN DE P E N DE N CE COR P OR AT AT E GOVE R N AN CE AN D R E SP ON SIB IL IT Y  DISCL OSUR E R E QUIR E ME N T S

PENALTIES FOR FRAUD AND OTHER VIOLATIONS

 

SECTION 302

SECTION 802

SECTION 409

iMPLICATIO N OF SARBANES

SECTION 401

OX L E Y A C T SECTION 404

 

COMPANY RESPONSIBILITY

AUDITOR

 Th e  The dvantages Of arbanes Oxley Act

EXPANSION OF DISCLOSURE

STOCK ANALYSIS

SECURITIES EXCHANGE COMMITTEE (SEC)

 

List of Pros of the Sarbanes-Oxley Act

List of Cons of the Sarbanes-Oxley Act

It discloses crucial information to shareholders

It is costly

It emphasizes the need for internal controls

It results in increased audit fees

 

IMPLICATION OF SARBANES OXLEY ACT

 

Companies That are Successful in Implementing Sarbanes and Oxley Act in Indonesia

S E CT I O N 4 0 4

S E CT I O N 3 0 2

 

SK Menteri Whose Production Is Based On Sarbanes and Oxley Act Keputusan Menteri BUMN Tgl 31 Juli 2002, Nomor: KEP-117/M-MBU/2002  Tentang  T entang Penerapan Penerapan Praktek Praktek Good Corporate Governance Governance Pada Pada BUMN.

Keputusan Ketua Badan Pengawas Pasar Modal (BAPEPAM) Tgl 12 Nov 2002, Nomor: KEP-20/PM/2002. KEP-20/PM/20 02. Tentang Independensi Independens i Akuntan Akuntan yang member memberikan ikan jasa audit di Pasar Modal. Keputusan Ketua Badan Pengawas Pasar Modal (BAPEPAM) Tgl 22 Des 2003, Nomor: KEP- 40/PM/2003. Tentang Tanggung Jawab Direksiatas Laporan Keuangan Keputusan Ketua Badan Pengawas Pasar Modal (BAPEPAM) Tgl 24 Sept 2004, Nomor: KEP–29/PM/2004, Tentang Pembentukan dan Pedoman Pelaksanaan Kerja Komite Audit KeputusanMentriKeuangan(KMK) Tgl30 Sept 2002, No. 423/KMK.06/2002 Tentang Jasa Akuntan Publik Peraturan Menteri Ke Keuangan uangan No. 17/PMK.01/2008 tentang Jasa Akuntan

Publik  

QUIZ

 

thank