Analysis Of The Sarbanes And Oxley Act Of 2002 (SOX)

1345 Words 5 Pages
The Sarbanes and Oxley Act of 2002 (SOX) was put into place because of outrageous fraud acts that were conducted by U.S. corporations that led to the layoffs of thousands of Americans. Companies were self-auditing therefore creating conflicts that might inflate accounting statements. The executives of the companies were not savvy enough to understand the complex forms to do addition checks on initial reporting. I this report the major topics that will be discussed are Mistakes made by the company and leadership, steps that could have been taken to prevent to avoid the repercussions of Sarbanes and Oxley Act of 2002. Market pressures that led to unethical behaviors, influence of the basics of finance and how Sarbanes and Oxley Act of 2002 has …show more content…
With every new technology that is launch an accountant must be in compliance with Sarbanes and Oxley Act of 2002 which inevitably slows the process of innovation to make sure all processes are in conjunction with Sarbanes and Oxley Act of 2002. “Firms are hiring extra accountants, consultants and even full-time staff to handle accounting procedures required by the act” (Kessler, 2004). Kessler points out the potential hinderence to companies whom are trying to innovate but are set back do to the Sarbanes and Oxley Act of …show more content…
The events that led to the Sarbanes and Oxley Act of 2002 where falsification of accounting documents that lead to employees losing their jobs and a bad public image portrayed by the offending companies. Steps that could have been taken to avoid the enactment of Sarbanes and Oxley Act of 2002, were to make sure the figures reported were accurate and reflected the true standing of the company. Independent auditing could have been accomplished to assure ethical practice. The role of market pressures made for unethical behavior in the way of creating false figures to compete with other companies and or have the offending company be bench marked against. to give investors the peace of mind of the company being stable and a low risk investment. Influence of basics of finance and how the Sarbanes and Oxley Act of 2002 changed finance was to give investors the peace of mind of the company being stable and a low risk investment if the financial statements were changed to give the appearance of a thriving company. Influence on ethical behavior since Sarbanes and Oxley Act of 2002 was enacted has been one of being watchful of what is being reported and following guidelines to protect the company from a potentially tarnished image. The Changes in the presentation of financial

Related Documents