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Sarbanes-Oxley Act Essay

658 Words3 Pages

This leads into whether or not the Sarbanes-Oxley Act was a necessary enactment and why. According to Breena E. Coates, “organizational malfeasance arises from deep within the culture of mega-corporations, and that it exists in the collective issues of complexity and strategy and in individual forms of behavior.” Corporate culture today allows ethics to be forgotten or set aside with many negative impacts. These are situations that SOX is trying to overcome. Enron is an example of how greed and corporate bluffing can hurt peoples’ lives and communities. The SOX Act is necessary to prevent and discipline corporate and accounting fraud. The enactment of the Running Head: THE ENRON DEBACLE AND THE IMPLEMENTATION OF THE SOX ACT 4 Sarbanes-Oxley Act of 2002 was …show more content…

If the company executives use their rules as contextual and situational guidelines, so will their employees. That is an example how bad social morality or business ethics are born. On the other hand there are benefits to working in an ethical environment. According to Curtis C. Verschoor, CMA, “an ethical culture makes it easier to attract the most qualified employees and minimizes the cost of employee turnover and retraining, which results in optimal productivity and higher profitability.” So not only will having good business ethics get you the best employees, it is also more cost-effective. These strong ethics are important and will likely draw consumers in. These are benefits of enacting the SOX Act. This table below shows that management has become more ethical in the eyes of their employees as a result of this SOX Act: 1 Coates, B. E. (2004). Corporate Culture, Corporate Mischief, and Legislated Ethics: The Sarbanes-Oxley Act. Journal Of Public Affairs, 7(1), 39-58. Running Head: THE ENRON DEBACLE AND THE IMPLEMENTATION OF THE SOX ACT 5 With today’s complex companies and impact of their leadership, the SOX Act becomes

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