The Provisions of Sarbanes-Oxley essays

The Provisions of Sarbanes-Oxley essays Richtermeyer, Greller, and Valentine (2006) believe that accounting and finance professionals, though knowledgeable regarding the measurement of corporate performance in many dimensions, may know less about the manner in which companies are evaluated from an ethical standpoint. In light of the provisions of the 2002 Sarbanes-Oxley Act (Public Law No. 107-204, 116 Stat. 745), accounting and finance professionals and the companies with which they work are now subject to more rigorous reporting, accountability, and regulatory oversight than ever before (Sarbanes-Oxley Act, 2006). The Sarbanes-Oxley Acts major provisions include the requirement that public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting and that independent auditors for such companies attest (agree or qualify) to such disclosure. Additionally, a major thrust of the Act is to institute enhanced criminal and civil penalties for violations of securities law and to create the Public Company Accounting Oversight Board (PCAOB) (Sarbanes-Oxley Act, 2006). Certainly, the creators of this legislation were responding to devastating ethical failures that rocked corporate America in the late 1990s and early 2000s. Had the companies generating these scandals used an instrument such as the CEV and had they then chosen to act to eliminate unethical behaviors, it is quite possible that some of these scandals could have been avoided. It is an unfortunate commentary on the American corporation that the government needed once again to step in and create new regulatory systems and enhanced criminal penalties to punish the very individuals in corporate America and in the accounting and finance professions who ought to adhere to the highest standards of ethical conduct. ...