Ethical Decision Making: The Sarbanes-Oxley Act Essay

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Is ethics concerning decision making merely an accepted way of life, a trust factor, or a concern for reputation? Is ethical thinking and decision making conclusions right for one individual or firm and wrong for another? Do ethics encompass a universal concept or do they reside solely in an individual realm such as one’s Id or ego as Freud claimed? Finally, do acts such as The Sarbanes-Oxley Act (SOX) create a sound solution to the problem of ethical or non-ethical decision making in public firms? According to many scholars, the subject of corporate ethical decision making has many different avenues, such as what Zhong states “involves(ing) systematic and analytic deliberation” which also involve “intelligent choices”. While both…show more content…
How has our recent dismay, concerns, and the actions of firms concerning ethical thinking, or the lack thereof relates to the past observations and does our recent laws and directives, such as SOX create as safety net to investors, employees, and the economy as well as drives the ethical decision making of CEO’s and CFO’s of public companies? Who benefits? Advantages and Disadvantages of the Sarbanes-Oxley Act of 2002 Should CEOs and CFOs be held accountable for fraudulent accounting practices? Should investors have complete and accurate information regarding potential investments? Following the Enron scandal in 2001, when Enron filed for bankruptcy after it was discovered that the company employed improper accounting practices, the alarm rang on Capitol Hill and the Sarbanes-Oxley Act (SOX) of 2002 was penned. SOX is one of the most significant regulatory reform’s since the Great Depression (McAdams et al, 2009, p.390). No longer was it publicly acceptable in the United States for CEOs and CFOs to lead their companies toward disaster and then use golden parachutes on the way down. As thousands of Enron’s employees lost everything, accountability of those who made millions leading companies was at the forefront. As we seek to evaluate the advantages and disadvantages of SOX legislation, we must understand why there was a need for significant reform. Prior to this Act, government oversight of publicly held

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