Peereview

In reaction to a number of high-profile accounting scandals since late 2001, Congress passed the Sarbanes-Oxley Act in July 2002 to enrich corporate governance and thus restore public assurance. The act has introduced substantial changes in both management’s reporting responsibilities and the possibility and landscape of the responsibilities of the auditor. The major provisions of the act established the Public Company Accounting Oversight Board (PCAOB), prohibited auditors from performing certain non-audit services their audit clients, imposed greater criminal penalties for corporate fraud, and called for more detailed and timely disclosure of financial information. Further, the law aims to solve specific mechanism failures in accounting methods and requires higher levels of fiduciary responsibilities for those involved in corporate governance. Section 404 of the Act required that management assess internal controls and that auditors report on the internal controls of their clients (Zhang, I

The up to $1 million in fines and 10 years of incarceration. Also if the certification was used as part of a larger fraudulent scheme, the penalties increase to $5 million in fines and 20 years of incarceration. The SOX Act also specifically directs the U.S. Sentencing Commission to amend sentencing guidelines to provide for harsher penalties for those convicted of securities fraud statutes.

The exploratory and descriptive quantitative study surveyed 35 dyads of CEOs and their senior team members to determine if there was differentiation between the moral judgments of organizational leaders and members, allowing for an alternative perspective by the member when the leader confronts an ethical decision.

Results showed differentiation in the development of moral judgments of leaders and members, which would allow for an alternative perspective by dyadic members. The existence or utilization of a code of ethics presented some disagreement or no...