Effects of Regulation with the Sarbanes-Oxley Act

1322 Words6 Pages
The Oxford dictionary states that fraud is the “wrongful or criminal deception intended to result in financial or personal gain” (Oxford University Press, 2014). It is arguable that only individuals have the ability to engage in fraud, but these individuals may lead corporations, which allows corporations also to commit acts of fraud. From a high-level perspective for combating this issue, many governments build a regulatory environment that interacts through firms and individuals. This regulatory environment exists as a series of laws and directives on the various government entities interact to ensure this protection. These laws and directives protect the public from fraud. This coverage of the regulatory environment even protects the public from fraud that happens within a corporation. Laws, such as the Sarbanes-Oxley act of 2002 give protection against internal fraud. Understanding the effects of regulation on ethical behavior, and understanding the regulatory environment, ensures that one possesses a basic understanding of how the regulatory environment protects the public.
Effects of Regulations on Ethical Behavior
What is Ethical Behavior
"Ethics refers to the well-founded standard of right and wrong that prescribed what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues” (Velasquez, Andre, Shanks, S.J., & Meyer, 2010, para. 9). A working definition of behavior is the cognitive or physical actions of the individual. Combining ethics with behavior creates ethical behavior that has the working definition of the actions that one should take in light of a standard agreement of what the group defines as right or wrong.
Understanding the Effects on Ethical...

... middle of paper ...

...ntegrity, and Facilitates Capital Formation. Retrieved from SEC.gov: http://www.sec.gov/about/whatwedo.shtml#.UySuOPldXYE
Shleifer, A. (414). Does Competition Destroy Ethical Behavior? The American Economic Review, 414-418.
SOX-Online. (2003-2012). Section 201 of the Sarbanes-Oxley Act. Retrieved from SOX-Online: http://www.sox-online.com/act_section_201.html
Taylor, D. (2005). What Sarbanes Oxley and Why Does It Change Everything? Retrieved from Ask Dave Taylor.com: http://www.askdavetaylor.com/what_is_sarbanes_oxley_and_why_does_it_change_everything/
The Sarbanes-Oxley Act of 2002 . (n.d.). Retrieved from Security and Exchange Commission: https://www.sec.gov/about/laws/soa2002.pdf
Velasquez, M., Andre, C., Shanks, T., S.J., & Meyer, M. J. (2010). What is Ethics? Retrieved from Santa Clara University: https://www.scu.edu/ethics/practicing/decision/whatisethics.html
Open Document