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Healthsouth And The Sarbanes-Oxley Act

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In 2002 Congress passed the Sarbanes-Oxley Act due to issues related to company executives falsely reporting financial information and practicing poor business ethics. This was passed due to lack of confidence in corporate America, and the demand from people to hold executives accountable for their decisions (Ferrell, Fraedrich, Ferrell, 2015). HealthSouth, one of the largest rehabilitation healthcare providers, was the first company charged under the Sarbanes-Oxley Act. Richard Scrushy and several other executives were indicted for overstating earnings by over 2.7 billion dollars, and the company was investigated by the Securities Exchange Commission for insider trading. This case has been used to discuss and teach business ethics (Wang, Lin, Ju, …show more content…
This is also the company in which I am now employed, and I do believe there is a connection between ethical behavior and the chance for long term survivability. Massive restructuring and new leadership with key compliance standards and code of conduct and ethics implemented, HealthSouth has been able to recovery from the fraudulent reporting and unethical behaviors. HealthSouth is now listed among the top 100 best places to work in healthcare by Modern HealthCare magazine (Best Places, 2016). HealthSouth had a miraculous comeback. Most companies don’t survive the scrutiny from competitors and regulatory agencies. Typically, if profits are increased by misuse of information the lifespan of the company decreases (Ferrell, Fraedrich, Ferrell, 2015). It is difficult to overcome stigma from poor ethics, and prior to working for the company I had my own bias related to the

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