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 changed finance, influence on ethical behavior since Sarbanes and Oxley Act of 2002 was enacted, changes in the presentation of financial statements.
Mistakes made by the company and their leadership
The events that led to the enacting of the Sarbanes and Oxley Act were made from accounting scandals from major corporations, Enron, Tyco International, Adelphia, Peregrine Systems and Worldcom. The mistakes made by the companies and their leadership were falsification of accounting activities, there was no effort made to look over the documents before they were submitted. The gross oversight inflated and falsified figures on accounting statements that led to company layoffs, legal issues and bad publicity for the companies involved.