Effect of Unethical Behavior Article Analysis

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Individual Assignment Effect of Unethical behavior Article analysis ACC/291 The Sarbanes-Oxley Act (SOX) was approved and passed in 2002 by Congress as an effort of preventing and also punishing corruption in corporations it also was created to restore the confidence of investors and the public. Sox was created as a response to several scandals that caused widespread government and public outrage against the corporations acting unethical. Fraudulent practices in accounting along with financial reports, which were misleading, issued by some of the biggest giants in corporate America such as Enron, and WorldCom, caused investors to lose millions, and created irreparable damage in public trust. Of all the SOX provisions sections 302 and 404, get most of the attention. Section 302 explains the responsibility of corporations on their financial reports (Verleun, 2011). Section 404 focus on assessments of management internal controls and requires management to be responsible for the maintenance and establishment of their internal controls. In addition section, 404 assess if the corporation internal control structure and their financial reporting procedures are effective ("A Guide to the Sarbanes-Oxley Act ", 2004). Section 303 of the act requires management certify reliability and accuracy of their financial statements. The act also requires in section 303 that the CFO and CEO both sign off all company financial statements. This is done so executives can be held accountable for any unethical activity on the financial statements ("A Guide to the Sarbanes-Oxley Act ", 2004). SOX has effected financial statements in many ways. SOX asks independent firms to audit financial statements in a way that the auditor’s positions are changed occasionally to prevent fraud. In conclusion, SOX has had a big impact on corporation’s financial statements forcing

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