Sarbanes-Oxley Act and Unethical Behavior

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Sarbanes-Oxley Act and Unethical Behavior Sarbanes-Oxley Act and Unethical Behavior Before 2002, companies financial reporting was loosely watched by the government. Many investors did not think about improper accounting as long as they were receiving the positive news about the company they invested in. When the financial scandals started, the government knew that they had a problem on their hands. In 2002, they passed the Sarbanes-Oxley Act that made companies more accountable for their financial reporting and honest accounting. There are many reasons corporations and employees decide to choose unethical practices when dealing with accounting. Greed is the first reason employees are unethical. According to Oseni (2011) “Consider, for example, how greed overtook concerns about human welfare when the Manville Corporation suppressed evidence that asbestos inhalation was killing its employees, or when Ford failed to correct a known defect that made its Pinto vulnerable to gas tank explosions following low speed rear-end collisions” (pg.3). Greed is hard for some to resist. A struggling company may see cheap shortcuts that may save money. These shortcuts may not be the safest choice, but to this company, the choice to save money trumps the choice to be safe. An employee may embezzle funds for his own personal gain or a chief Financial Officer (CFO) may believe that he needs to report false information to increase the company’s stock portfolio or their bonus for the financial period. All of these are an example of unethical choices led by greed. Laziness is another factor that can cause people in the accounting field to make unethical choices. For instance, an accountant may not do an in-depth analysis of a financial report because he wants to take shortcuts or a CFO feels that he does not need to double check numbers because they are

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