Accounting and Financial Statements (Ethics)
general accounting. Yates pled guilty to charges of securities fraud and conspiracy.
Betty Vinson former director of management reporting. Vinson pled guilty to charges of conspiracy to commit securities fraud.
Troy Normand director of legal entity accounting. Normand pled guilty to securities fraud and conspiracy charges (www.worldcomstockfraud.com).
The WorldCom fraud may have been committed for a number of reasons which may have included: The fact that top management did not want to loose the faith of stockholders; simply buying time with the hope of eventually turning a profit; and maybe mast importantly executives wanted to maintain jobs and bonuses.
Securities and Exchange Commission
The Securities and Exchanges Commission (SEC) is the governing body over all securities markets in the US. Its primary mission is to protect investors and maintain the integrity of the market. (www.sec.gov/about/whatwedo.shtml) The commission oversees a wide variety of stakeholders in the securities markets including: the markets themselves, investors, companies traded on the exchanges, broker-dealers, investment advisors, mutual funds, and public utility holding companies. A board of 5 commissioners, 4 Divisions, and 18 offices make up the SEC. Many laws have been created to aid the SEC in their mission, but one simple concept prevails: All investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it. (www.sec.gov/about/whatwedo.shtml)
Numerous laws have been passed giving power to the SEC throughout the years. However, the three possibly most influential were separated by a span of seven decades. The first law requiring companies to disclose information to the public, the Securities Act of 1933, was enabled in response to the stock market crash of 1929. The law had two main purposes, the disclosure of financial and other significant information to the public regarding securities, as well as to prohibit deceit, misrepresentation and fraud in the sales of securities (www.sec.gov/about/laws.shtml). The creation of the SEC actually did not come about until the following year when the Securities Exchange Act of 1934 was passed. The act gave the SEC the ability to regulate the all markets in the US, define prohibited conduct in regards to security dealings, and require financial reporting of all companies with publicly traded securities (www.sec.gov/about/laws.shtml). Insider trading laws stem directly from this act, as the commission was given the right to define restrictions that keep the market fair, unbiased, and equal. Recently, the Sarbanes-Oxley Act of 2002 allowed the SEC to adopt rules that strengthen the integrity of securities traded on the market.
Quality appears to be the most important notion which the SEC basis their organization on. The SEC defines quality as an encompassing term comprising utility, objectivity, and integrity. (www.sec.gov/about/dataqualityguide.htm) Furthermore, they define the three terms included in the definition as follows:
Utility - refers to the relative usefulness of the information to [next page]