Ethical Behavior

Effect of Unethical Behavior Article Analysis

ACC-291

December 2, 2013

Effect of Unethical Behavior Article Analysis

According to the Sarbanes-Oxley Act that was passed by congress in 2002 as an effort for preventing and also as a deterrent for corporate corruption, this Act was created in order to restore people’s confidence and comfort ability in their investments. The SOX Act was established as a response to the public out cries after several different companies had wide spread scandals. These types of scandalous behaviors / practices in accounting including financial reporting. Some of the biggest corporations that was involved with this type of scandalous behavior was Enron, and WorldCom, these corporations was the reason behind many investors losing millions of dollars causing the public to lose trust in their investments.

After reading through the SOX provisions I found that two different parts seem to get a lot of attention these sections are 302 and 404. Section 404 focuses primarily on the assessments of management, it requires management to be responsible for the maintenance and establishment of their internal controls. Section 404 also asses the company or corporation internal control structure and their financial reporting procedures (Protovoti, 2002).

Secondly the SOX Act section 303 requires management to certify reliability and accuracy of their financial statements. This include the CFO and the CEO must sign off on all company finical statements. The reasoning behind this theory is that by having them sign it than that will make the executive accountable for any and all unethical accounting activity (Protovoti, 2002). Every measure that has been instilled in the business world due to unethical practices has been evaluated and reevaluated in such a manner that it is hard for anyone in a company to try and provide any type of unethical activity with the company’s finances.

In conclusion, were as any law or procedures cannot teach a...