Ethics and the Sarbanes-Oxley Act

Paper Summary:

The paper explains that the essence of corporate ethical responsibility is the embracing of strategies that are transparent, easily accounted for and free from conflicts of interest. The paper explains how this was lacking in many corporations who found that through sophisticated trading and fund management, fake financial results could be created to give the illusion of greater profits, growth and earning potential. The paper discusses how the US Congress felt it necessary to legislate corporate responsibility and ethics in the form of laws. The paper details the Sarbanes-Oxley (SOX) legislation and relates that these laws are forcing companies to comply with legislation that will guarantee fiscal accountability and corporate responsibility for ethical behavior.

Outline:
Defining Ethical Responsibility
Enforcing Corporate Responsibility
Sarbanes-Oxley is Redefining Corporate Ethics and Responsibility

From the Paper:

"The Sarbanes-Oxley (SOX) legislation promises to be just the beginning of a tidal wave of compliance legislation that will influence organizations and their strategies to attain corporate responsibility for years to come. CEOs specifically are at the center of many of the compliance efforts, as they will be held personally responsible for any aberrations in reporting and financial data. The fact that many publicly-held companies are contending with as the revised deadline approaches for Section 404 compliance and are still not ready shows that even with legislation, corporate responsibility takes a strong commitment from C-level executives to become real in a company."

Sample of Sources Used:

• Sarbanes-Oxley (2002) - Discussion of the Act, downloaded from the Internet on June 1, 2006 from: http://www.sarbanes-oxley.com/section.php
• Economist (2006) - Virtual Champions. Economist Magazine. Downloaded from the Internet on June 1, 2006 from: http://www.economist.com/surveys/PrinterFriendly.cfm?story_id=6969722

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