Let’s start with Dodd-Frank. Sections 922 and 929A of Dodd-Frank strengthen and expand the whistleblower provision of the Sarbanes-Oxley Act ("SOX"). Dodd-Frank essentially prohibits publicly-traded companies' subsidiaries and affiliates from retaliating against employees who report fraud against shareholders. A salient provision in the law allows a person who provides original information about a securities law violation to the SEC, to collect a range of ten-percent to thirty percent of the total penalties imposed by the SEC. This obviously should increase the number of tips and referral the SEC receives. 

A more complex fraud opportunity in financial statement fraud is “Fair Value & its Impact on Financial Statements.” Fair value is used as a certainty of the market value of an asset (or liability) for which a market price can be determined. (Financial instruments, marketable securities, shares of private equity and non-financial instruments, intangibles.)

1. Discuss the benefits and the costs of Dodd-Frank’s whistleblower provision. Demonstrate with examples. Conclude with an evaluation of this provision and if you believe there is a better solution, please propose in a cogent manner.

2. Please define fair value as it relates to financial reporting. Explain and critique any inconsistencies you may note in this definition. In your explanation distinguish among the Fair Value Hierarchy i.e. Level 1, Level 2 and Level 3. Identify the internal and external risks that accompany each level while questioning what attributes could be material or not.

3. Describe the difference between an accounting error & accounting irregularity?

Answer rating: 100% (QA)

1 DoddFranks whistleblower provision offers several benefits to employees who report fraud against shareholders First the law protects employees from ... View the full answer