Case Study The Sarbanes-Oxley Act Of 2002

A code of ethics is a vital for any business, because if breaches of ethics accrue it can put companies in serious trouble with consumers, other organizations or government authorities. Making a code of ethics helps decision-making easier at all levels of an organization by reducing doubt and considerations of individual viewpoint in ethical standards.

A code of ethics is important because it provides individuals within a group, organization, club or society with a set of rules, standards and guidelines to operate within. When employees don't have a code of ethics, they could engage in less-than-socially acceptable behavior. This can establish a bad reputation for an organization.

Unfortunately, the creation of SOX and a code of ethics in no way guarantee’s that everyone will follow the rules; people will always find a way to circumvent the system or misrepresent the code’s intentions. Even the most robust ethics program needs constant oversight to remain effective. The pressure to increase profits and market share can lead executives to push the boundaries of ethical business behavior. Despite the passage of SOX, some of the largest and most well-established companies are currently crossing those boundaries.

Ethics, ethical values, and social responsibility should all work in unison in a corporate business structure. These key traits are better defined as maintaining overall good business morals, obtaining employees who possess personal ethical values, and finally to behave ethically and with sensitivity toward social, cultural, economic and environmental issues. For a business to better ensure these quality business traits a code of ethics should be adopted by the business. In the cases of Bernie Madoff and Enron, the most well-known financial scandals in history, I feel, gave a major hand in pushing business all across America to have and enforce the code of ethics.

Violations of company standards, policies, procedures, and ethics program guidelines, could result in employee reprimand, probation, suspension, salary reduction, demotion, or dismissal. In addition, employees may be held responsible for damages and/or losses, or referred for criminal prosecution or civil action.

A reaction expected to the Code of Ethics is respect. Each employee is responsible for making reasonable decisions that are in the best interest of the company. Employees are given this position and are expected to be in compliance with the Code of Ethics; respecting all rules and regulations. As a former employee I was responsible to have the client’s best interest at hand and conduct the company with integrity, honesty and in a highly ethical manner. Management expected us to maintain our professionalism and try to help the clients as much as possible.

“Analytically, a corporation’s code of ethics is the documented, formal, and legal manifestation of that organization’s expectations of ethical behaviors by its employees” (Adelstein & Clegg, 2016, p. 55). The corporate credos and code of conducts provide employees with an understanding of the policies of the organization and the organizational ethical position. For these codes to be effective, all employees of the organization must be aware of them. The visibility of the code of conduct that enables the organization to be judged as ethical.

Yes I agreed with the authors that a code of ethics should do more than establish minimum acceptable standards. As noted that, ethical behavior in any profession is about making correct judgment or decision that are based on established code of ethics. Businesses always drive the behavior that is expected in an organization. Successful businesses try to build high ethical culture from the top management level to the lowest and setting the standards for acceptable and unacceptable conduct in an organization.

The Sarbanes-Oxley Act of 2002 (SOX) was enacted to bring back public trust in markets. Building trust requires ethics within organizations. Through codes of ethics, organizations are put in line to conduct themselves in a manner that promotes public trust. Through defining a code of ethics, organizations can follow, market becomes fair for investors to have confidence in the integrity of the disclosures and financial reports given to them. The code of ethics include “the promotion of honest and ethical conduct, requiring disclosure on the codes that apply to senior financial officers, and including provisions to encourage whistle blowing” (A Business Ethics Perspective on Sarbanes Oxley and the Organizational Sentencing Guidelines). The Sarbanes-Oxley Act was signed into law from public demand for a reform. Even though there are some criticism about it, the act still stands to prevent and punish corporate fraud and malpractice.

The Sarbanes-Oxley Act of 2002 (SOX) was enacted to bring back public trust in markets. Building trust requires ethics within organizations. Through codes of ethics, organizations conduct themselves in a manner that promotes public trust. Through defining a code of ethics, organizations can follow, the market becomes fair for investors to have confidence in the integrity of the disclosures and financial reports given to them. The code of ethics includes the promotion of honest and ethical conduct. This code requires disclosure on the codes that apply to senior financial officers and including provisions to encourage whistle blowing, a Business Ethics Perspective on Sarbanes-Oxley and the Organizational Sentencing Guidelines. The Congress signed the Sarbanes-Oxley Act into law in response to the public demand for reform. Even though there is some criticism of it, the act still stands to prevent and punish corporate fraud and malpractice.

The two regulatory requirements that my financial institution must consider before going public are The Gramm-Leach-Bliley Act, and Sarbanes-Oxley Act (SOX). The Gramm-Leach-Bliley Act is a law that requires financial institutions to explain their information sharing practices to their customers and to protect sensitive data. There are three requirements for the Gramm-Leach-Bliley Act, the first is that insurance companies, banks, and brokerage companies are required to secure stored personal financial information. Next the company must advise you on their policy on sharing vital information. The final requirement is that the company has to give the consumer the option to choose whether they want their personal financial information shared.

In his testimony concerning the implementation of the Sarbanes-Oxley Act of 2002, Chairman of the U.S. Securities and Exchange Commission William H. Donaldson says that the first year of the Sarbanes-Oxley Act has produced an impressive record of accomplishments in an incredibly short period of time. The Act set ambitious deadlines for more than 15 separate rulemaking projects by the Commission to implement many of the Act's provisions. The Commission provided a number of opportunities for public input on its proposals, and thousands of letters of public comment in crafting final rules were carefully

The Sarbanes-Oxley (SOX) Act of 2002 was signed into federal law on July 30, 2002. The stated purpose of the law is "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the security laws, and for other purposes." The law has influenced long term changes in the way publicly traded companies manage auditors, financial reporting, executive responsibility and internal controls. SOX is considered the most substantial piece of corporate regulation since the securities laws of the 1930's (Stults, 2004).

A code of ethics highlights the responsibility and accountability standards of each and every employee within the organization. These codes are also motivating factors that guide the employees’ behavior, set the standard regarding ethical conduct, and build an organizations trustworthiness within

The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.   In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.   Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a