Case Study: A Prime on Sarbanes-Oxley

Feb 3rd, 2012
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Congress enacted the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) to restore public trust in the markets. Among its ways of achieving this, Sarbanes-Oxley attempts to improve organizational ethics by defining a code of ethics as including the promotion of honest and ethical conduct, requiring disclosure on the codes that apply to senior financial officers, and including provisions to encourage whistle blowing. The Securities Exchange Commissions implemented rules expanding the disclosure requirement on the code of ethics to include codes that apply to the chief executive officer and further develop the definition of a code of ethics. Using Case 4.11, a Primer on Sarbanes-Oxley, answer questions 1-3. After reading the document and before answering the questions, initiate your paper with the problem statement; The problem to be investigated is ________________________.

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Case Study: A Prime on Sarbanes-OxleyThe purpose of this research is to impart a scholastic opinion on the topic of the issues and activities covered in the Sarbanes-Oxley (SOX) Act that should be considered and acted upon as ethical and voluntarily resolved, the estimated additional cost as a result of the implementation of new SOX requirements, and last but not least, the list of the governing practices that should be communicated to companies to stay in compliance with the SOX. In 2002, Paul Sarbanes, a Democratic senator from Maryland, and Michael Oxley, a Republican congressman from Ohio, presented a bill in their relative bodies which would bring forth legislation to regulate the misleading affairs of the publicly traded companies (SOX-online, 2012). The SOX Act was ratified by the United States Congress to safeguard the interests of the shareholders against potential devious accounting activities by public companies, by bringing in austere reforms with the objective of getting the factual fiscal information disclosed by companies, thwarting accounting chicanery, in view of the accounting frauds perpetuated by WorldCom and Enron, that shook the confidence of the shareholders on relying financial statements that ultimately required a revamp of financial governing standards (Investopedia, 2012). Disclosing the financial results truly is significant and vital for investors, consumers, competitors, and government agencies that make use of these reports. The

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