Ethical Issues With The Sarbanes-Oxley Act

Accounting practices were previously less regulated than they are today. The main reason that we have the Sarbanes-Oxley act is due to series of accounting frauds committed by companies such as Enron, Worldcom, and Freddie Mac. These companies knowingly misstated earnings, overinflated assets, or hid debts and mislead stockholders. These practices were unethical because companies knowingly exploited Gray areas in legislation for profit.

After the abuse of accounting frauds occurred the Sarbanes-Oxley act was created. This act establishes corporate responsibility for financial reporting, works to prevent conflicts of interest between those in management and shareholders, and establishes an ethical code with checks such as real-time disclosures and whistleblower protection, and additionally outlines penalties for violation.

The main ethical issue I believe in this situation …show more content…
It is my personal belief that corporations need to implement a code of ethics that is uniformly adhered to.

It is unethical for individual employees to do unethical things. They are sometimes considered to not be fully responsible for their actions if their jobs are at steak. If management is making the individual employees think that they should be acting unethically then they are in the wrong. Saying that they are just trying to keep up with the rest of the industry’s practices is not a justifiable reason to do things that cause harm.

In order to move forward companies need to focus on developing an ethical code that is adhered to by all levels of employees. It needs to be clear that the culture of the company demands that individuals within the company do the right thing, are verifying that those they are responsible for are doing the right thing, and how situations in which unethical behavior is occurring can be dealt