Making Management Decision About Sarbanes Oxley

It is often recommended for (HCO)’s to have a corporate compliance plan to be more efficient, reduce errors, and not have small errors turn into large errors. As (OIG) it’s a necessary and fundamental need to incorporate a corporate compliance plan to have for staff and management to stay organized and lessen the chance of fraud, waste, and abuse in the company. Stated by, (Cleverly, Song, & Cleverly, 2011), it is effective only if it includes management support, effective communication, continuous monitoring, and individual accountability. All these aspects are a continual monitoring requirement as long the corporate compliance is in place for the duration.

Throughout history and in our own time, legitimate accounting methods have been utilized to fraudulently engage in manipulating activities that results in illicit gains to the perpetrators and losses to individuals and financial institutions.

Trinity’s project team began the implementation of SOX with pilot projects to obtain a general idea of what was going to be required across the entire company. During the scoping phase of implementation, Trinity selected two business units, Highway Safety and Marine Tank-Barge, to assist the SOX compliance team in understanding how much time and effort would be needed, what control documentation would be required, and what control gaps would be identified (Schultze, 2011, p. 96). Trinity’s team worked closely with members of each business unit and conducted interviews with the goal of documenting the processes and controls of those units. The next step was that the team performed a gap analysis to identify gaps of the processes and controls and rectified the gaps when discovered. The identified controls were then assigned to various employees and quarterly those employees would have to complete a control certification letter, which would allow the

In the past, many corporate executive have committed various forms scandals in their organizations. Such fraudulent arts are unethical and immoral behavior. This led the US government to form legislation in order to control fraudulent activities; mostly performed by senior officers in the organization. In view of this, this paper will address the following: historical summary on SOX enactment, the key ethical components of SOX, social responsibility implications regarding mandatory publication of corporate ethics, whether the criticisms of SOX implication presents an unfair burden on smaller organizations and suggestions on the improvement of SOX legislation.

The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and covers and sets new performance standards for boards of directors and managers of companies and accounting mechanisms of all publicly traded companies in America. It also introduces criminal liability for the board of directors and a requirement by

The purpose of this research paper is to see how the Sorbanes-Oxley Act changed the era of low standards

The Sarbanes-Oxley Act was passes in 2002 in response to a handful of large corporate scandals that occurred between the years 2000 to 2002, resulting in the losses of billions of dollars by investors. Enron, Worldcom and Tyco are probably the most well known companies that were involved in these scandals, but there were a number of other companies guilty of such things as well. The Sarbanes-Oxley Act was passed as a way to crackdown on corporations by setting new and improved standards that all United States’ public companies and accounting firms were and are required to abide by. It also works to hold top level executives accountable for the company, and if fraudulent behaviors are discovered then the executives could find themselves in hot water. The punishments for such fraudulence could be as serious as 20 years jail time. (Sarbanes-Oxley Act, 2014). The primary motivation for the act was to prevent future scandals from happening, or at least, make it much more difficult for them to happen. The act was also passed largely to protect the people—the shareholders—from corporations, their executives, and their boards of directors. Critics tend to argue that the act is to complicated, and costs to much to abide by, leading to the United States losing its “competitive edge” in the global marketplace (Sarbanes-Oxley Act, 2014). The Sarbanes-Oxley act, like most things, has its pros and cons. It is costly; studies have shown that this act has cost companies millions of

The Sarbanes-Oxley Act, or SOX Act, was enacted on July 30, 2002. Since it was enacted that summer it has changed how the public business handle their accounting and auditing. The federal law was made coming off of a number of large corporations involved in scandals. For example a company like Enron was caught in accounting fraud in late 2001 when the company was using false financial statements. Once Enron was caught that had many lawsuits filed against them and had to file for bankruptcy. It was this scandal that played a big part in producing the Sarbanes-Oxley act in 2002.

At first, the Sarbanes-Oxley Act is the U.S. law about to protect investors from the possibility of deceptive accounting activity by a corporation and improving fraudulent a financial report. The act commands strict reforms to improve financial disclosures from corporations and prevent accounting fraud. The act requires to companies because it increases the credibility of the companies’ financial statements from investors. The act defined to restore investor’s confidence in the financial market and close loopholes that allowed a company to defraud investors. Moreover, the act is a requirement that public companies for the strength audit committees, a test that to perform internal control, making directors and officers personally liable for

The act (Sarbanes-Oxley Act) is a law formed to stop corporate scam. Through it, companies are banned from discriminating any staff who lawfully helps in giving information in conduct researches that the workers sensibly considers to be a violation of National Securities Laws (Eaton, 2007). In the case above, it addressed air pollution, emissions and cars. The act would not apply to the two engineers as whistleblowers since the law only protects the corporation’s staffs that feel they are being hit back against by their boss after perceiving an infringement of National Securities Laws. As a result, the two are safe. Their whistleblowing case is unique since they were not working for any Fortune 500 Company. They are simply university researchers.

The company has an obligation to their clients to protect their information and prevented their employees from committing fraud against their customers. Per Burnoski (2015) “When things are going well, people don’t really think about fraud, and that’s a good opportunity for certain motivated people to commit fraud (Burnoski, 2015).” During the years that the employees and managers were conspiring to boost their sales goals and hit unrealistic quotas should have been a red flag for companies to perform an audit. The CEOs knew when they set the goals that were pushed to the sales team, the goals were extremely hard to obtain. Once they realized several teams across the company were making their sales quota, an investigation should have been launched.

The first internal control weakness that is persistent is the FCC’s financial reporting processes is inadequate manual reporting process and financial system integration. Another significant deficiency of the internal control system identified is the information technology controls of the FCC. The two weaknesses are considered to be significant deficiencies however; the auditors never specified whether the deficiencies were material. A significant deficiency in internal control is a deficiency or combination of deficiencies that is not severe than a material weakness, though important enough for

Thank you Peter. So based on your experienced and observation with the company that you used to work with, did the changes a financial burden to your company? How about the participation of the top level executives, were they visible and active to cope up with the said changes. I am just curious because before Sarbanes-Oxley (SOX) was signed into law, it is the middle and low level management that works hard for the board and the organization as a whole. And now due to SOX, directors need to be more proactive along with the need for greater technical expertise to effectively serve the organization. Seems like SOX is a good wake up call for the top level

The second article reviewed was Does SOX 404 Have Teeth? Consequences of the Failure to Report Existing Internal Control Weaknesses. The abstract discusses the penalties associated with Section 404 of the SOX. In addition, the abstract looks at companies that have submitted restatements and views the control weaknesses report within the restatements.

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