What is Sarbanes-Oxley   Term Paper ID:33731 Click to get this paper

Essay Subject: This paper reviews the major provisions of the Sarbanes-Oxley Act of discusses pros and ...... More...

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Paper Abstract: This paper reviews the major provisions of the Sarbanes-Oxley Act of 2002, the legislation enacted to protect investors. Discusses pros and cons of the Act, as well as implications and ethical considerations. Paper Introduction: The Sarbanes-Oxley Act of is a piece of legislation enacted inJuly with the intent to protect investors by improving the accuracyand reliability of corporate disclosures made pursuant to the securitieslaws Specifically this act comprises titles with multiple sectionswithin each title the major provisions of which include the certificationof financial statements by CEOs and CFOs prohibition of personal loans toofficers and directors rapid reporting of legal inside trades publicreporting of CEO and CFO compensation whistleblower provisions andprotections significantly longer jail sentences and larger Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. March 2, 2 5. http://management.silicon.com/itpro/ ,39 24675,39125165, .htmUnited States Congress. (2 2) One hundred seventh Congress of the United States of America at the Second Session. Additionally, there are more shareholder motions to curbexcessive executive compensation. htmlHartman, T. http://home.aigonline.com/content/ ,11 9,18125-1425-legal-- legal, .htmlFass, A. As opposed to side-stepping rules of what not to do, Sarbanes-Oxleyopens an new portal for misconduct with its increased protections forwhistleblowers. (2 3) Sticker shock. March 2, 2 5. Ultimately, Sarbanes-Oxley may do little for the prevention ofcorporate fraud and unethical behavior, but it certainly has advancedcorporate and individual accountability. For example, according to a report on Forbes.com, in 2 1, only about1% of brokerage reports recommended investors sell; in 2 3, that numberwas up to 2 %. Clearly, the intended benefits of such legislation is improvedcorporate transparency and resulting investor protections. Here, there is the pronounced potential for disgruntledemployees to initiate false complaints and even seek damages. (2 4) United States: The impact of Sarbanes-Oxley on private companies. March 2, 2 5. March 2, 2 5. The Sarbanes-Oxley Act of 2 2 is a piece of legislation enacted inJuly 2 2 with the intent to "protect investors by improving the accuracyand reliability of corporate disclosures made pursuant to the securitieslaws." Specifically, this act comprises 11 titles with multiple sectionswithin each title, the major provisions of which include: the certificationof financial statements by CEOs and CFOs; prohibition of personal loans toofficers and directors; rapid reporting of legal inside trades; publicreporting of CEO and CFO compensation; whistleblower provisions andprotections; significantly longer jail sentences and larger fines forcriminal and civil securities violations; the establishment of an internalaudit function that is certified by external auditors and includes moresafeguards to ensure that the audit committee is not controlled bymanagement; restrictions on auditors, including auditor independence, banson certain types of work, and pre-certification by the company's auditcommittee of all non-audit work; prohibition on audit firms providing extraservices to their clients including actuarial, legal, and consultingservices unrelated to their audit work; and the requirement that publicly-traded companies furnish independent annual audit reports on the existenceand condition of internal controls with respect to financial reporting. And, while Sarbanes-Oxley pertains onlyto publicly-traded companies, more than half of the 9, private companiessurveyed by Foley and Lardner (2 4) reported that it had self-imposedseveral governance reform measures. Further criticism comes from foreign entitiesthat resent the United States for seeking jurisdiction over their nationalaffairs. With Sarbanes-Oxley now in full effect, there are many ethicalconsiderations to address, as well as new potential avenues for unethicalbehaviors. March 2, 2 5. While the law forces companies to "promise to behave" through a codeof conduct, more significant is the requirement to more accurately reportfinancial conditions, and the repercussion of not complying. It is also noteworthy that the code of ethicsapplies only to a company's "principal executive officer, principalfinancial officer, principal accounting officer or controller, or personsperforming similar functions." In fact, adherence to it is not arequirement of all employees, leaving room for substantial lower levelmisconduct. Forbes.com. aigonline.com. However, withseveral years experience now, criticism is mounting that some elements ofthe legislation are overly burdensome and unnecessary. http://www.cfo.com/article.cfm/3 1 299?f=relatedSilicon.com. While this requirement is an attempt to rebuild the trust ofthe misled investing public, in practice, it is a futile attempt, as Enron,for example, had a code of ethics in place while in the midst of itswrongdoings, which did nothing to change the course of actions of theguilty Enron executives. cfo.com. As with any legislation, accordingto Wes Rehm (2 4), senior vice president for SAS, "Like you can'tlegislate for morality, you can't legislate for good behaviour." Works CitedFaegre & Benson (2 4) Sarbanes-Oxley whistleblowers: Are you prepared to respond to a complaint? Mondaq.com. March 2, 2 5. This too,however, can certainly be circumvented by unethical managers and employees.In fact, while misconduct will be more difficult to hide with the greatercorporate transparency and oversight resulting from Sarbanes-Oxley,personal greed will continue to drive these wrongdoings, despite theexistence of the new "thou shall not" regulations. http://www.forbes.com/technology/corpgov/2 3/ 7/22/cz_af_ 722sarbanes. (2 4) Leader: Sarbanes-Oxley - another law to ignore? (2 3) Reforming the boardroom: One year later, the impact of Sarbanes-Oxley. In fact,according to a report by Faegre & Benson (2 4), the Department of Labornow receives more Sarbanes-Oxley whistleblower complaints than any othertype of whistleblower charge, which is remarkable considering theDepartment oversees many other whistleblower laws which have been activefor decades. The Sarbanes-Oxley Act was enacted largely in response to the highlypublicized corporate frauds and auditing failures that occurred in theearly 2 s. In addition to the costs being felt by all public companies, largeand small, to date, the impact of Sarbanes-Oxley is just beginning to befelt. http://news.findlaw.com/hdocs/docs/gwbush/sarbanesoxley 723 2.pdf Infact, a group of Washington-based businesses are preparing to lobby forreforms, stating that, while the provision is appropriate for largecorporations, the costs are prohibitive with respect to small businesses,as maintaining such controls can reach $5 , per year, according to astudy by CFO magazine (2 3). http://www.mondaq.com/i_article.asp_Q_articleid_E_28359Nyberg, A. Most significantly,many critics are claiming that some provisions within the Sarbanes-Oxleylaw (most significantly Section 4 4, which requires the creation ofextensive policies and controls within public companies to secure,document, process, and verify material information dealing with financialresults) are debilitating to small businesses from a cost standpoint. Sarbanes-Oxley requires companies to have a written code ofethics in place, identify any waivers to it, or explain why it has notadopted one. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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