Abstract The Sarbanes-Oxley Act was signed into law on July 29, 2002. It was the U.S. government's response to the questionable business practices of a number of corporate executives, which caused across-the-board declines in the value of stock in publicly-traded companies during the summer of 2002. The passage of the Act has been heralded by some as an historic occasion, some calling it a long overdue corporate reform package, while others have severely criticized the Act as an unnecessary overreaction by the government. This paper discusses the business conditions that prompted the passage of the Act, the accounting problems that made the Act necessary, the advantages and disadvantages of the Act, and the effect of the Act on the future of the accounting profession.
From the Paper "The Corporate Sector in the United States is already sufficiently regulated. Further regulation goes against the principles of a free market economy that is one of the basic principles of the country's economy. What was needed in the wake of bankruptcy scandals was stricter enforcement of the existing laws rather than creating new ones.
The Act was a knee-jerk reaction to the accounting scandals in a tiny percentage of businesses. The new reporting requirements of Sarbanes-Oxley will divert the attentions of managements and boards of directors to self-protection away from the business purposes of companies."
Abstract This paper explains that the Sarbanes-Oxley Act came about because of the bankruptcies of Enron, Global Crossing, Adelphia, and WorldCom. These companies had hidden their true financial health from creditors and shareholders until an inability to meet financial commitments forced them to restate earnings that revealed massive losses. The author points out that a disadvantage of this Act is that the corporate sector in the United States is already sufficiently regulated, making it one of most tightly controlled in the world. The paper relates that the Sarbanes-Oxley Act restores the all-important role of the auditors as corporate "watchdogs", which is desirable for ensuring compliance with the prescribed accounting standards, and expands the role of the audit committee by making it responsible for appointing and overseeing the performance of the internal auditors.
Table of Contents
Introduction
Background
Accounting Problems that Led to Sarbanes-Oxley
Advantages of the Act
Disadvantages of the Act
Effect of the Act on the Future of Accounting Profession
Opinion
From the Paper "One of the provisions of Sarbanes-Oxley makes the chief executive officers (CEOs) and chief financial officers (CFOs) personally responsible for signing false accounts and financial statements. They can now get stiff jail terms for violating the law by signing false and misleading financial statements. Before Sarbanes-Oxley many CEOs and CFOs pleaded innocence when financial irregularities were revealed by claiming that they were unaware of the "cooking" of the books by their subordinates."
Abstract This paper discusses that a deterioration and lapses in ethical standards have led to the demise of some corporation. The author uses a table form to explains the findings regarding each corporations. The paper includes the corporation's status at the height of its success, its leadership, types and kinds of lapses and the effects on the corporation.
From the Paper "The concept of business ethics is far more complex than it appears at first glance. There are many facets to corporate ethics including the company's obligation to its employees and to its stockholder, workers duties to their employer and the company's duties to regulatory agencies such as the SEC and watchdog agencies including the Occupational Health and Safety Administration, the Equal Employment Opportunity Commission and the Environmental Protection Agency. There are also ethical duties to both related and unrelated third parties. For example, ..."
Tags: leadership, managemnet, ethical busienss behavior, enron, WorldCom, Global Crossing, Arthir Anderson, Adelphia, greeed corruption, losses to investors
