Sample Law Essay on U.S. Securities And Exchange Commission

Competency 1

Within the United States, accounting and auditing standards are regulated and promulgated by
different organizations. These organizations may be influenced by the (SRO’s) self-governing
bodies, the state or federal organizations as well as from entities owned by the government,
business practitioners and nonprofit organizations (Gray, 2000). Congress, by retaining the
oversight responsibility has pursued to attain auditing and accounting policies through the
enaction of a number of legislation.
Standards of accounting and auditing established for publicly traded corporations fall subject to
oversight from the (SEC) Securities and Exchange Commission. Here, the Sec derives its power
and funding from the government and relies heavily on SRO’s to create standards for financial
reporting in the private sector which are referred to as Generally Accepted Accounting Principles
(GAAP). The Financial Accounting Standards Board (FASB) is recognized by the SEC as the
chosen authority that came up with the GAAP. The public company accounting oversight board
(PCAOB) creates the SOX to run and manage the private sector auditing section. The managing
authority over PCAOB and FASB is all charged under the SEC.
Competency 2

Lacking objectivity, ignorance and biases are among the major unethical violation by
professionals on professional standards. A situation that may reflect this is when an analyst at a
firm writes and publishes reports gained from research that misrepresents the risks to investors
who are looking to invest in companies in the market(Lohse, Pascalau & Thomann, 2014). Later,
it is discovered that the reports generated are aimed at pleasing the executive board of the
companies in question. This misleading report makes client buy shares which in the long run


incurred losses. They, in turn, question the basis of the report where they establish that unethical
practices were done. Unethical behavior ultimately injures the investment organization. It harms
the business and leads to lower revenues and relatively higher costs due to the instigation of
expensive investigations.

Competency 3

Skepticism is an integral part of any authors skill set. It is closely interconnected with one’s
professional judgment. Particularly, skepticism is crucial in sectors of the audit that encompass
substantial management judgments or transactions that are not within the regular course of
conducting business(Lohse, Pascalau & Thomann, 2014). When addressing fraud risks,
professional skepticism should be employed appropriately by auditors to appropriately alter
planned audit processes and procedures.
Encouraging engagements by personnel in the organization, reviewing work, planning and
directing encourages the need for a questioning achieve professional skepticism, it is
important to assign personnel with essential capabilities and eluding unfitting confidence in the

Deloitte and Touche Chartered Accountants – March- 13th -2018

Situated in Zimbabwe, Deloitte & Touche Chartered Accountants is a member firm of the larger
privately owned company, Deloitte Touche Tohmatsu Limited which is based in the Toronto,
Canada. The Zimbabwe Deloitte is not registered under the PCAOB. Under the U.S securities
regulations and laws, the PCAOB demands that all organizations that deal with accounting
matters be registered before they begin “preparing” or “issuing” reports from audits to any issuer


irrespective. For a six-year duration, the Zimbabwe-based Deloitte operated with no prior
registration with the PCAOB. The violations, under the Sarbanes-Oxley 2002 (section 102) were
deemed fitting by the cooperation to induce sanctions to the firm.
The firm was ordered to desist from committing further violations of section 102 of the
Sarbanes-Oxley, to pay disgorgement fee amounting to a subtotal of $99,057.34 within a 60 day
period to the US treasury.



Dean, A. (1959). Twenty-Five Years of Federal Securities Regulation by the Securities and
Exchange Commission. Columbia Law Review, 59(5), 697.
Gray, R. (2000). Current Developments and Trends in Social and Environmental Auditing,
Reporting and Attestation: A Review and Comment. International Journal Of Auditing, 4(3),


Lohse, T., Pascalau, R., & Thomann, C. (2014). Public enforcement of securities market rules:
Resource-based evidence from the Securities and Exchange Commission. Journal Of Economic
Behavior & Organization, 106, 197-212.