Sarbanes-Oxley and Chargbacks

Accounting for Chargebacks and the Sarbanes Oxley Act

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Date

Abstract

The Sarbanes Oxley Act (Sox ) was enacted in 2002 after a spate of accounting scandals involving huge companies like Enron and WorldCom led to the loss of thousands of jobs and billions of dollars of shareholder wealth . Aimed at restoring investor confidence the Sox introduced a number of laws that aimed to improve the internal controls of companies and made the CEOs and CFOs of companies criminally liable for breach of its provisions

Among its many new

requirements , the enactment of Sox also made it compulsory for all publicly traded companies to improve their accounting of trade and distributor chargebacks , which , until then , had remained in a state of neglect and apart from leading to misrepresentation of accounts , also caused significant monetary losses to distributors

This study explores the provisions of Sox , with particular reference to chargeback accounting , and the measures needed for compliance

Table of Contents

Serial Details Page

Abstract 2

1 . Introduction 4

1 .1 Overview 4

1 .2 Elaboration of Problem 5

1 .3 Aims and Objectives 6

1 .4 Structure 7

2 .0 Methodology 8

2 .1 Formulation of Research Question 8

2 .2 Methodology 8

2 .3 Limitations 9

3 .0 Literature Review 10

3 .1 The Sarbanes Oxley Act 10

3 .2 Chargeback Accounting 16

3 .3 Chargeback Accounting and the Sarbanes Oxley Act 17

3 .4 Handling Chargeback 19

4 .0 Conclusions 20

Works Cited 22 1 .0 Introduction

1 .1...