Sarbanes Oxley Act
In the effort to reduce corporate power, Congress passed the Sarbanes-Oxley (SOX) Act “in 2002 to protect investors form the possibility of fraudulent accounting activities by corporations,” (Root 2015). In response to all the scandals reported involving major corporations like Enron, Tyco, and WorldCom, liability was made to corporate responsibility as investors and shareholders suffered major losses due to financial and accounting obstructions from those within the company. The Sarbanes-Oxley Act “created an accounting oversight board that required corporations to establish codes of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interest parties,” (Ferrell, …show more content…
However, due to foreign investors not understanding the laws of other countries regarding U.S. businesses adequately, some are taken advantage of so companies keep their flow of funds.
“President Jimmy Carter attempted to focus on personal and administrative efforts to uphold ethical principles in government. The Foreign Corrupt Practices Act (FCPA) was passed during his administration, making it illegal for U. S. businesses to bribe government officials of other countries,” (Ferrell, Fraedrich, and Ferrell 13).
The FCPA was to put an end to bribery to foreign officials and investors so that companies can maintain their business inflows of cash. In addition to anti-bribery provisions, “the FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions,” (US Department of Justice n.d.).
“It requires issuers to maintain accurate books and records and have a system of internal controls sufficient to provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management’s authorization,” (SEC …show more content…
From my understanding, the FCPA is like the baby or prototype of the three concepts. It is what the government passed to keep major corporations in order with potential investors and current investors who seek to depart. The act entails that the investor ties to the company are up to the investor’s discretion and not the company’s. What actions are taken regarding company investment are controlled by the investors without the influence by companies to keep them. However, I believe to know only the surface of this act as penalties and consequences, and limits and boundaries are still unknown to
In the effort to reduce corporate power, Congress passed the Sarbanes-Oxley (SOX) Act “in 2002 to protect investors form the possibility of fraudulent accounting activities by corporations,” (Root 2015). In response to all the scandals reported involving major corporations like Enron, Tyco, and WorldCom, liability was made to corporate responsibility as investors and shareholders suffered major losses due to financial and accounting obstructions from those within the company. The Sarbanes-Oxley Act “created an accounting oversight board that required corporations to establish codes of ethics for financial reporting and to develop greater transparency in financial reports to investors and other interest parties,” (Ferrell, …show more content…
However, due to foreign investors not understanding the laws of other countries regarding U.S. businesses adequately, some are taken advantage of so companies keep their flow of funds.
“President Jimmy Carter attempted to focus on personal and administrative efforts to uphold ethical principles in government. The Foreign Corrupt Practices Act (FCPA) was passed during his administration, making it illegal for U. S. businesses to bribe government officials of other countries,” (Ferrell, Fraedrich, and Ferrell 13).
The FCPA was to put an end to bribery to foreign officials and investors so that companies can maintain their business inflows of cash. In addition to anti-bribery provisions, “the FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions,” (US Department of Justice n.d.).
“It requires issuers to maintain accurate books and records and have a system of internal controls sufficient to provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management’s authorization,” (SEC …show more content…
From my understanding, the FCPA is like the baby or prototype of the three concepts. It is what the government passed to keep major corporations in order with potential investors and current investors who seek to depart. The act entails that the investor ties to the company are up to the investor’s discretion and not the company’s. What actions are taken regarding company investment are controlled by the investors without the influence by companies to keep them. However, I believe to know only the surface of this act as penalties and consequences, and limits and boundaries are still unknown to