Sarbanes-Oxley Act Research Paper

Ashley Spargur
Professor Ken Schallenkamp
Business Ethics
29 November 2014
Sarbanes-Oxley Act
“Just as character matters in people, it matters in organizations” – Justin Schultz
What does Enron, Tyco, World Com, and Adelphia all have in common? Fraud, and the catalyst for the Act we have come to know as the Sarbanes-Oxley Act. Even though I was only ten when the Enron scandal began I remember hearing it on the news, my parents discussing it, and the media buzzing about it. Even though their scandal has ended, long-term effects still exist. Enron’s failure represents that if there is a benefit to be had, a company will not stop at ethical boundaries to reach it. Throughout the course it has become clear to me that even though you are a moral …show more content…
This board was created to oversee professional individuals in the accounting practice. Especially, those who conduct independent audits. According to U.S. Securities and Exchange Commission, this board has multiple responsibilities including; registering public accounting firms, establishing auditing, quality control, ethics, independence, and other standards relating to public company audits, conducting inspections, investigations, and disciplinary proceedings of registered account firms, and enforcing compliance with …show more content…
Once determined, the company should follow the appropriate GAAP objectives even if conflict arises. It is crucial for each company to develop their own policies and procedures regarding revenue recognition rules. “Core practices move the emphasis from a focus on the individual’s moral capability to focus on developing structurally sound organizational core practices and integrity for both financial and nonfinancial performance” (Ferrell 120). The organizational structure is set up with checks and balances among each specific committee to ensure proper revenue recognition, sales reporting, and contract management. “So, even if you can’t really regulate ethics, the fact that more people are more closely scrutinizing board behavior encourages directors to be more responsible,” says Mary Driscoll, and analyst with Standard & Poor’s. “But, there is no panacea, and I think we will continue to see abuses and excesses—but hopefully fewer” (Silverstein). Historical data must be kept regarding pricing, past and current. Lastly, having a correct and up to date software is crucial. Another important provision to this Act is the Whistle-Blowing Protection. One of the most infamous whistle-blowing movies was based on John Grisham’s novel, “The Firm”. Even though this example of whistle-blowing may not be exactly what the law protects it still exemplifies the value

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