Sox Research Paper

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.

History of SOX - the Sarbanes-Oxley Act of 2002 is legislation in response to the high profile financial scandals, such as seen with Enron and WorldCom. The purpose of this act is to protect shareholders and the general

SOX enactment is an act that was formulated as a result of corporate scandals from Enron, WorldCom, Adelphia, and Tyco. However, Congress succumbed to pressure from the public for the government to take action about the unethical behavior of company executives of publicly –traded companies. Thus, the Sarbanes-Oxley (SOX) was to restore the integrity and public confidence in financial markets. During these scandals, there were flagrant disregard to Generally Accepted Accounting Practices (GAAP). For example, according to Washington Post (2005), WorldCom

I and two other individuals have agreed to start a business that will provide management consulting services to nonprofit organizations. Because of the increased scrutiny on actions of corporations and those who act on behalf of organizations, we have determined that it would be essential to have our ethics program developed before we start offering our services. A business as a moral agent must prove that it has an effective ethics program to protect employees, the corporation, and businesses that the company will serve. It is also important to have an ethics program to support the ethical values of our corporation and to make it clear to employees what is acceptable behavior, and to make clear what policies and standards are to be

The main objective of the Sarbanes-Oxley act was to reduce fraud. So far that objective seem to have been obtain. Since SOX was enacted, there has not been a major domestic corporate financial scandal uncovered other than the options back-dating scandal that occurred before July 2002 (Jahmani & Dowling, 2008). It is a tax advantage because companies and investors are not losing money.

Our Code of Ethics Program is designed to uphold the interests of every stakeholder of Given Company. Our mission is to uphold a high level of integrity by maintaining high company standards, values and principles to ensure the company meets its mission of being a good corporate citizen who is socially responsible. Our program provides effective guidance for daily decision making for all levels of personnel in an effort to establish and promote long-term relationships within Given Company and with our customers and community. The overall goal of the program is to be diligent in establishing a culture

According to Terry Sheridan, in the article, SOX Compliance is Still a Challenge- and Costly- for Many Companies, she states that “Aside from external audit fees,

Every organization is requires a code of ethics and mechanisms to address risk management and the clear disclosure of financial practices. Every organization has a compliance code that must fallow according to the Miami Valley Hospital (2010) compliance codes are updated periodically and anyone who does not fallow the Compliance Plan of Conduct can face fatal consequences such as criminal charges or can permanently lose his or her job. Not meeting compliance codes can also affect the organization because can be fine, or face criminal charges losing reputation and prestige.

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.

Sarbanes-Oxley (SOX) was created to address the reoccurrence the likes of the several major scandals of the past. The nature of those past years scandals made it clear that preventative measures was a possible way to prevent any future scandals. And the efficacy of Sarbanes Oxley Act, many people as well as companies believed that fraud is easy to prevent.

Ethics are values and principles that individuals use to govern his decisions and activities. Ethics are about moral judgment of an individual about right and wrong. In an organization, code of ethics refers to set of guiding principles and organizations use these principles in their policies, programs, and decisions for business. Within organizations, decisions are taken by groups or individuals and these decisions are influenced by the culture of the company. Decision making and relevance of ethics may also differ for nonprofit and for profit organizations. In contemporary business environment, organizations must have a clear ethical policy and implement it in proper manner. There are many social, legal and economic outcomes that company has to face in case of any ethical dilemma, so there must be a smart strategy to deal with ethical dilemmas. In this paper, we will address the ethics for nonprofit and profits organizations, ethical dilemmas being faced or faced by each of these companies and the outcomes of these ethical dilemmas. Critique of actions of each of these companies will be provided from the point of view of applicable philosophical theories of organizational ethics.

As CEO of a Fortune 500 company, I would ensure that my accounting system would comply with the Sarbanes-Oxley (SOX) Act. In order to meet those requirements, the company will regularly have unscheduled audits, password updates and ongoing ethics trainings. Honestly, this will prevent any attempted misuse of an accountant’s authorizations and misrepresenting financial reporting in the systems. It is important as CEO to make sure that everyone in the company is in alignment and collaborate with the SOX act order to ensure continued success of the company. In the event, unethical behavior is identify, it is the duty of the CEO to make sure the event is isolate until compliance measures are met by taking a holistic approach (Hardy, 2010). In

      The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general

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.

Section 404 requires public companies to establish internal controls and report annually on their effectiveness over financial reporting. The CFO and CEO are held personally responsible for the internal controls via the requirement to sign a statement certifying the adequacy of the internal control system (Moffett and Grant, 2011, p. 3). Additionally, the company’s independent auditor must issue an attestation regarding management’s assessment of the internal structure as part of the company’s annual report (Bloch, 2003, p. 68).