Sarbanes-oxley act of 2002
Course:- Accounting Basics
Reference No.:- EM13872141

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Fraud in the AIS

For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case.

Explain how the firm's accounting information system (i.e., components and functions) contributed to the fraud and / or embezzlement. You will need to focus on how each component / function of the accounting information system failed, which resulted in the scandal / case.

Write a ten to twelve (10-12) page paper in which you:

Based on the information you researched, assess the failure of the firm's accounting information system to prevent the related fraud / embezzlement.

Imagine that the company that you researched uses a third-party accounting system. Evaluate the effectiveness of the firm's stakeholder in the event that a third-party accounting system suffers a breach. Include an assessment of the level of responsibility of the software provider to the business and its clients. Provide support for your rationale.

Determine what advances in accounting and / or information technology could have prevented the event from occurring. Provide support for your argument.

Evaluate what changes should be made to both the Sarbanes-Oxley Act of 2002 and other current laws in order to make them more effective in deterring companies from committing crimes.

Recommend a strategy that the company you indicated may use to prevent future business information failures. Indicate how the company should approach the implementation of your recommended strategy. Provide support for your recommendation.

Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow

APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

Analyze the business activities that comprise an accounting information system to determine the information needs to support decision-making function.

Use technology and information resources to research issues in accounting information systems.

Write clearly and concisely about accounting information systems using proper writing mechanics.


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Introduction 3
What is an Accounting Information System (AIS) 4
The Failure of Enron International 6
Sarbanes Oxley and its role in preventing such frauds in future 10
Conclusion 11
Bibliography 11

Accounting Fraud is not new to business community. Sometimes it is the accounting information system which is at fault and sometimes it is the failure of overall management team and their complicity with the accounting and auditing departments that perpetrates the fraud. It has happened with HIH in Australia, it has happened with Enron INC in United States. Of all the frauds that have happened all over the world the Enron Accounting Fraud was the largest and also one of the most coordinated fraudulent behaviour with clear-cut complicity of the Auditors. The collapse of Enron brought to the fore the lack of regulatory mechanism to prevent fraud or at least it brought into notice the systematic fraudulent behaviour that went on inside the energy giants offices for decades undetected. The scale was so massive at the time it happened that it shook the business fraternity to the core. And perhaps it necessitated an urgency to regulate more deeply and more urgently the whole of business corporations to safeguard the investor interests.

An accounting information system is known as the system of collection of data, storing the data in an appropriate format and processing the data to help the decision makers such as the board of directors and managers to reach conclusive evidence of how profitable ventures can be undertaken with the sole aim of minimising risks. The AIS is generally computer base technology now a days with the aim of retrieving management reports quickly to aid in research and taking spontaneous decisions.

However the Accounting Information system has undergone systemic change in the last two decades. With corporations all over the world reaching mammoth in size and expanding their operations to all corners of the world, it became not only necessary but also imperative to them to invent new technology and ways to minimise costs. This is where ERP software’s has come in and helped tremendously (Burge, 2010,2nd edition). ERP has become the backbone of new resource management system in any organisation of today. ERP is implemented in any entity in the form of a core software database system which aims to integrate and manage all the sub-data bases in that organisation. One of the most importance development in this area is that of SAP.SAP is an ERP (Enterprise resource planning) management system which looks to integrate fully all the departments.

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