Management_Discussion_Question_2_Answer

Apr 24th, 2015
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Management_Discussion_Question_2_Answer

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Value Based Management (graded) What's the purpose of the Sarbanes-Oxley Act?After many companies like Enron's unethical practices the government got involved with setting up standards, check points, and consequences behind accounting practices. This would prevent short sited greedy managers from pumping up number in the short run. Then they would cash out and walk away. The Sarbanes-Oxley Act was implemented to improve the accountability in the operations of companies within the U.S. When a company does not comply with this law it can result in major penalties on their company boards. The main purpose of the SOX was to keep large businesses from being subjected to fraud and deception by their investors and shareholders. Basically this act is for protecting the investors from public companies. It acts as a shield for investors from losing their asset unfairly. The investors are also prevented from being misguided into investing in business. The Sarbanes Oxley Act contains eleven major sections, ranging from extra corporate board duties to punishment. SEC (Securities and Exchange Commission) looks after the implementation of the Sarbanes Oxley Act. It always checks that the issuers report and file records properly and timely. This activity again prevents companies from misleading or inaccurate financial standing.Three important points of the SOX influence the management of company records. The first point restricts the destruction, alteration, and falsification of

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