Referring back to Scott Sullivan, it is difficult to assess whether the presence of the provisions would prevent or deter the financial statements. On section 302, its provision has fully alerted senior management to the importance of the financial reporting process. While the penalties are issued by SEC in its final rule, it is extended to the criminal penalties associated to violate the provisions of Section 302. Violators have to pay million dollar fines and up to 20 years’ imprisonment. Having this consequences, it will deter individual, like Scott Sullivan, from engaging in material financial statements fraud.
[9] Document your views about the effectiveness of regulatory reforms, such as the Sarbanes-Oxley Act of 2002, in preventing and deterring financial reporting fraud and other unethical actions. Discuss whether you believe the solution for preventing and deterring such acts is more effective through regulation and other legal reforms or through teaching and instruction about moral and ethical values conducted in school, at home, in church, or through other avenues outside