Ethics and Financial Reporting

Sarbanes–Oxley, Sarbox or SOX, is a United States federal law which was introduced in 2002. It is also known as the “Public Company Accounting Reform and Investor Protection Act” and “and 'Corporate and Auditing Accountability and Responsibility Act”. The main objective of the act is to protect investors by improving the accuracy and reliability of corporate disclosures. New aspects are created by SOX act for corporate accountability as well as new penalties for wrong doings. It was basically introduced after major corporate and accounting scandals including the scandals of Enron, WorldCom etc so that the same kind of scandals do not repeat again.

The Sarbanes-Oxley Act (SOX) is a legislation enacted in 2002 under the sponsorship of U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH). The law introduced increased government oversight for publicly held companies. It also imposes additional management responsibilities and corporate operating costs on companies trading under SEC regulations. Sarbanes-Oxley was enacted in direct response to a number of corporate accounting scandals, including those of Enron, Tyco International, and WorldCom.

Sarbanes-Oxley Act of 2002 (SOX), enacted on July 29,2002, is a United States Federal law that imposed new rules and regulations for all US public companies.

In the corporate world today the rules and regulations are stricter than they were in early 2000. The development of corporate governance that established procedures to be used by officers and directors for lines of responsibility, approval, oversight by key stockholders, and set the rules for corporate decision making became more extreme. The Sarbanes-Oxley Act (SOX) of 2002 made the use of ethical decision making more prominent in today's business environment. The SOX Act established the penalties for both criminal and civil charges as well as those in the corporate world are not protected. The term "piercing the corporate veil"

What is The Sarbanes-Oxley Act? “With more than half of all American households invested in U.S. public companies, the discoveries of financial reporting and auditing improprieties at Enron and numerous other public companies beginning five years ago swelled in 2002 to a national crisis in confidence in the integrity and reliability of public companies’ financial statements and of external audits.” This act of 2002 is a legislation passed by the U.S. Congress to guard shareholders and the general public against accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures. SOX defines individual accountability and requires employees to construct an investigation of a business or person before signing a

The Sarbanes-Oxley Act of 2002, also known as the SOX Act, was created in response to the series of misleading and outright fraudulent activity of big business in 1990s (Lasher, 2008, p. 187). Multiple publicly-traded businesses raised up their stock prices by “publishing false or deceptive financial statements” (Lasher, 2008, p. 187). The most notable company to crash were Enron, WorldCom and Tyco. Eventually almost one thousand publicly traded companies restated their financial statements which resulted in almost $6 trillion of stock market value disappearing (Lasher, 2008, p. 187). In response to these events, Congress drafted and passed the Sarbanes-Oxley Act (SOX) of 2002.

The main purpose of this research proposal will be to focusing on the Sarbanes-Oxley Act also known as SOX which was enacted on the 30th July 2002. The Sarbanes-Oxley Act was named after the two benefactors which are U.S Senator Paul Sarbanes and U.S Representative Michael Garver Oxley. This act was established after several high profile accounting scandals which occurred in the United States such as Worldcom and Enron the aim was to prevent such cases from occurring again in the future. To put the

Although the Sarbanes-Oxley (SOX) Act comes with many different benefits, the Act itself still consists of any major pros and cons. The SOX Act must review what needed to fix or changed due to the unfair to small companies. Therefore, it should be considering making improvements to other areas to ensures fair practices. Like many major businesses guidelines, the SOX Act should do its part to push to prevent conflict of interest. Although it has made significant improvement on the reliability of financial reporting for public traded companies and helping investors in today business world. It still need to assures the auditing process is fair and consistent to tighten the awareness of unethical practices. The SOX Act has already put major company

The article entitled "The Sarbanes - Oxley Debacle" written by Henry Butler and Larry Ribstein discusses their viewpoint of the eponymous piece of legislation. From the adjective that the two use in describing the Sarbanes Oxley Act, it is obvious that they are critical of the legislation and believe that it fails in its endeavors to create accountability or punishment for organizations and businesses that fail to perform ethically and legally. In 2002, the United States government passed a law which is called the Sarbanes-Oxley Act (SOX). It is also known as the "Public Company Accounting Reform and Investor Protection Act" or the "Corporate and Auditing Accountability and Responsibility Act." The intention of the legislation was well-intentioned and the authors do not deny this point. What they believe is that the issues that are discussed in the Sarbanes-Oxley Act are not being properly resolved with the piece of legislation and that it requires substantial alterations if not outright abolition.

Another important point is the reporting to whom. Financial accounting is meant for external reporting to all who are interested in the company’s activities. But in management accounting it is altogether an internal reporting aimed at helping managers in discharging their responsibilities.

The SOX act was put in place to force companies to obtain audits of the internal operation. The internal investigations were put in place to reduce the amount of in house fraud that businesses receive from their employees. Based on SOX audits, “Markets have been able to use the information to assess companies more effectively, managers have improved internal processes, and the internal control testing has become more cost-effective over time, per Srinivasan (Hanna, 2014)”. Companies that use the internal audits to properly manage their companies, will see a decline in fraud within their

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

The ethical breaches of numerous prominent corporations prompted Congress to pass legislation in response to accounting misconduct. The purpose of the Sarbanes Oxley Act of 2002 (SOX) was to protect investors by increasing the reliability of financial reporting and enhancing audit quality. One of the most influential and costly parts of the Act is Section 404. Section 404 requires companies to establish internal controls and test procedures that are designed to monitor and prevent manipulation of financial data (Brite, 2013). This requires all CEO’s and CFO’s to certify that they have reviewed all financial reports and there are no false and misleading information. The Public Accounting Company Oversight Board (PACOB) was established under the supervision of the Securities and Exchange Commission (SEC) to oversee and regulate auditing standards by enlisting external auditors to review the accuracy of financial statements and enforce laws.

Sarbanes Oxley (also known as SOX) is legislation passed by the United States Congress in 2002, in the wake of a number of major corporate accounting scandals. Enron, WorldCom, Tyco, and others cost investors billions when their stock prices collapsed. As a result of SOX, top management must separately certify the accuracy of financial Furthermore, consequences for fraudulent financial activity are much more severe. Also, SOX intensified the management role of boards of directors and the independence of the external auditors who review the accuracy of corporate financial statements. The primary changes caused the formation of the Public Company Accounting Oversight Board, the assessment of personal liability to auditors, executives and board members and creation of the Section 404, which recognized internal control events that had not existed before the legislation.

The Sarbanes-Oxley Act of 2002 (SOX) was enacted into law in 2002 in the wake of corporation financial reporting scandals involving large publicly held companies. SOX instituted new strict financial regulations with the intent of improving accounting practices and protecting investors from corporate misconduct. SOX requires corporate executives to vouch for the accuracy of financial statements, and to institute and monitor effective internal controls over financial reporting. The cost of implementing an effective internal control structure are onerous, and SOX inflicts opportunity costs upon an enterprise as executives have