Sarbanes Oxley And Fraud Research Paper

2287 Words10 Pages
Introduction Fraudulent behavior is an increasingly popular choice of lifestyle that everyday affects the lives of millions, whether they are the perpetrator or the guiltless party – both expose themselves to unwarranted future lifestyles. Undisclosed bonuses and salaries demonstrate the degree of unfairness that exists behind closed doors. Today, this research paper will focus on the importance of Sarbanes-Oxley and its lasting impact aiming to protect hundreds of thousands of entry-level employees or any other type of employee facing the possibility of being a victim of fraud.
Background
The Great Depression unleashed as a serious threat in October1929 – the unfortunate day that the stock market crashed. Further, it is known as one of the
…show more content…
is the primary regulator of markets and securities under the federal government; moreover, the S.E.C. aims to promulgate an efficient and fair market. Since its debut, the S.E.C. has administered similar laws normalizing and protecting individuals and companies. The S.E.C. also mandates that the New York Stock Exchange disclose real time exchanges and transactions. The S.E.C. is comprised of approximately 3,000 attorneys, accountants, and economists. The head of the S.E.C., known as the chairman or chairwoman is appointed by the president and their term lasts five years. Under the S.E.C., there are four organizations that focus on different aspects of the economy which are: the Division of Enforcement, the Division of Investment Management, the Division of Corporate Finance, and the Division of Market…show more content…
Patterson and J. Reed Smith, have distinctly observed that once under closely scrutiny, managers inclined to commit fraud included certain weaknesses with their auditing plan. Fortunately, under the Sarbanes-Oxley Act, managers can and in fact penalized for their choice of system control. Moreover, dishonest managers chose a stronger system – this complicates the issue in its entirety as it conveys to the auditor that he is honest. The most interesting aspect of audit risk under Sarbanes-Oxley is: “Finally, audit risk, which is the probability of undetected fraud, goes up with Sarbanes-Oxley, while expected fraud goes down” (Patterson and Read, 429). This implies that a certain weakness exists within the boundaries of Sarbanes-Oxley, a weakness that may not necessarily be easy to locate rather easier to

More about Sarbanes Oxley And Fraud Research Paper

Get Access