The Ethics Of The Sarbanes Oxley Act Essay

The Ethics Of The Sarbanes Oxley Act Essay

Length: 918 words (2.6 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

“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...

... middle of paper ...

... 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).

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on Ethics Of The Sarbanes Oxley ( Sox ) Act Of 2002

- In the recent years, many businesses have taken a closer look at how the business ethics can either hinder the business or assist them in the growth or sustainability of the business. Examining the different variables of how ethics places into the business’s social responsibilities, and their sustainably organizational strategy and business model. Along with this, both internal and external stakeholders have a part in the influence of the business’s strategy. Although there are many influences to how ethical the business is, many businesses have become more ethically sound after the introduction of the Sarbanes-Oxley (SOX) Act of 2002, which deals with the accounting side of the business (Ba...   [tags: Ethics, Business ethics, Management, Business]

Better Essays
859 words (2.5 pages)

Essay on The Sarbanes Oxley Act Helped Change Business Ethics And Culture

- Our group believes that there are several factors that contribute to poor ethical analysis, decisions, and self-destructive behavior. On an organizational and industry level, some of those factors include loose ethical standards being put into place, inadequate enforcement on the part of managers and executives, having too much opportunity to act unethically, and pressure to make profit. On a societal level, the biggest factor is the constant push to be successful, which can lead to people acting unethically to achieve that success....   [tags: Business ethics, Ethics, Enron]

Better Essays
898 words (2.6 pages)

Essay on The Sarbanes Oxley Act Of 2002

- Ethicality, or the lack of, plays a large part in the broad spectrum of business. It is the duty of every business person to conform to a certain code of ethics. Because of scandals in regard to ethicality, such as Enron, WorldCom, and TYCO, The Sarbanes-Oxley Act of 2002 was passed in order to create a better system of promoting and supervising the ethicality of all businesses and their employees. “In compliance with the Sarbanes-Oxley Act of 2002, in 2003 the NYSE (2009) and the NASDAQ (2009) issued new corporate governance rules that require their listed companies to adopt and disclose a code of business conduct and ethics....   [tags: Ethics, Business ethics, Corporate governance]

Better Essays
1012 words (2.9 pages)

About the Sarbanes-Oxley Act Essay

- Between the years 2000 and 2002 there were over a dozen corporate scandals involving unethical corporate governance practices. The allegations ranged from faulty revenue reporting and falsifying financial records, to the shredding and destruction of financial documents (Patsuris, 2002). Most notably, are the cases involving Enron and Arthur Andersen. The allegations of the Enron scandal went public in October 2001. They included, hiding debt and boosting profits to the tune of more than one billion dollars....   [tags: Corporate Fraud, Business Ethics ]

Better Essays
2065 words (5.9 pages)

Essay on Details of the Sarbanes Oxley Act 2002

- An auditor’s role in an audit is very important. An auditor must be able to collect enough evidence to supports their finding, and also be on the lookout for fraud. Company’s may or may not know the law, but it is the job to know the law, and be able to educate and report findings properly. Since the Sarbanes-Oxley Act, there have been provisions that have directly affected auditors. This paper will include the details of the Sarbanes-Oxley Act, how ethics and independence have affected auditors, as well implementation of new standards based on the Sarbanes-Oxley Act....   [tags: auditor, sarbanes oxley act, auditing]

Better Essays
1056 words (3 pages)

Sarbanes-Oxley Act of 2002 Essay

- Ethics continues to be a hot issue in the business world. The focus on business ethics grew after several significant business scandals beginning in the millennium. These scandals prompted the government to pass new accounting regulations to increase the control and accuracy of financial reporting. A prominent piece of legislation is the Sarbanes-Oxley Act of 2002, which applies to publicly traded businesses. The basis of Sarbanes-Oxley is to increase the reliability and accuracy of financial reporting (Noreen)....   [tags: Business Ethics]

Better Essays
1353 words (3.9 pages)

Essay about The Sarbanes Oxley Act :

- Running Head: The Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 John Webb FINC 620 Jason Ma, MBA, DBA Table of Contents The Sarbanes-Oxley Act 3 Negative Effects of SOX 4 Changes in Education, Post-SOX 5 Conclusion 6 References 7 The Sarbanes-Oxley Act The Sarbanes-Oxley Act, also known as the Public Company Accounting Reform and Investor Protection Act of 2002, was a congressional retort to a plethora of major corporate and accounting scandals that included companies such as Enron, Tyco International, Adelphia, Peregrine Systems, HealthSouth, and WorldCom....   [tags: Internal control, Enron, Sarbanes–Oxley Act]

Better Essays
1089 words (3.1 pages)

Private Companies Struggle With The Sarbanes-Oxley Act Essay

- Samuel Smiles, an 18th century Scottish, writer once said, "It is possible that the scrupulously honest man may not grow rich so fast as the unscrupulous and dishonest one; but, the success will be of a truer kind, earned without fraud or injustice. And even though a man should for a time be unsuccessful, still he must be honest: better lose all and save character. For character is itself a fortune…" (Zaadz, 2005). Major corporate scandals such as Enron and WorldCom shook the business world at the turn of the century in a powerful way....   [tags: Business Ethics Morals ]

Better Essays
1962 words (5.6 pages)

Sarbanes Oxley Act of 2004 Essay

- Sarbanes Oxley Act of 2004 The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 by President Bush. The new law came after major corporate scandals involving Enron, Arthur Anderson, WorldCom. Its goals are to protect investors by improving accuracy of and reliability of corporate disclosures and to restore investor confidence. The law is considered the most important change in securities and corporate law since the New Deal. The act is named after Senator Paul Sarbanes of Maryland and Representative Michael Oxley of Ohio (Wikipedia Online)....   [tags: Investment Investor Sarbanes Oxley Essays Papers]

Better Essays
1715 words (4.9 pages)

A Corporate Code of Ethics is Not Enough Essay

- After news of the scandal of Enron, one of the hottest items on e-Bay was a 64-page copy of Enron’s corporate code of ethics. One seller/former employee proclaimed it had “never been opened.” In the forward Kenneth L. Lay, CEO of Enron stated, “We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty and that it is respected (Enron 2).” For a company with such an extensive code of ethics and a CEO who seemed to want the company to be respected for that, there are still so many unanswered questions of what exactly went wrong....   [tags: Sarbanes-Oxley Act of 2002 H.R. 3763-45]

Better Essays
2353 words (6.7 pages)