The Ethics Of The Sarbanes Oxley Act Essay

The Ethics Of The Sarbanes Oxley Act Essay

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Introduction
“Talk about ethics values, integrity and social responsibility is not only becoming acceptable in business community, it’s practically required” (Joyner, 2002, p.298). Revising the literature in which ethical standards are fundamental for the operation of business today, it’s definitely worthwhile to recognize the industry’s concern for the welfare of society and the growing demand for managing business ethically and responsibly. After Enron’s corporate unlawful activity, and other companies misconduct, such as WorldCom and Halliburton, the government and the public sector start to look for fresh methods to support ethical behavior. In light of this, the Congress of the United States passed the Sarbanes-Oxley Act in 2002 to address ethical and legal risks (Ferrell, Fraedrich, Ferrell, 2013, p.14). Since given the ethical lapses manifested over the past two decades, restoring trust in the free-market system and in leaders has become a challenge under the overriding perception of society. Studies have revealed that society at large consider that good ethics is good business. The capitalist system has put a lot of faith in implementing high ethical standards, including respect, integrity, honesty and citizenship. Not only creating an ethical environment of a business has been a burden for today’s entrepreneurs, yet it has also been the basis for social rewards such as clean air and water, good schools and health facilities, and lower levels of criminality. As corporate ethics have become a growing concern for society, the literature proposes that enhancing social responsibility, enforcing an ethical culture, and making ethical decisions, not only can lead to business success, but also benefit our economic system in the l...


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... may lead to a distinct bias in risk analysis management” (Atlas, 2013, p. 53). When firms fail to comply with legal actions or are found guilty of unethical practices, the organizations’ reputation tarnishes, and then is followed by fines and lawsuits. It is said that building a good reputation may take years, yet put an end to it only a few seconds. According to Atlas (2013), the Securities and Exchange Commission (SEC) collected billionaires’ amounts in fines for companies that were making unsuitable payments. In view of this fact, it is better to stay away from unlawful activities and dishonest practices. In order to promote a common understanding in the area of social responsibility, the International Organization for Standardization (ISO) established ISO 2600, a CSR regulation that serves as a guideline for businesses (Ferrell, et. All, 2013, p. 39).










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