Sarbanes-Oxley Research Paper Example | Topics and Well Written Essays - 750 words

Sarbanes-Oxley - Research Paper Example Oxley. The scenario that led to the implementation of this act was the number of corporate accounting ignominies including that of Enron, Tyco International, Adelphia, Peregrine Systems, and WorldCom etc. According to the US government record, the definitions including ‘Appropriate State Regularity Authority’, ‘Audit’, ‘Audit Committee’, ‘Audit Report’, ‘Board’, ‘Commission’, ‘Issuer’, ‘Non-Audit Services’, ‘Person Associated With a Public Accounting Firm’, ‘Professional Standards’, ‘Public Accounting Firm’, ‘Security’ and ‘State’ shall apply to this act (Public Law 107-204, 2002). It consist of11 sections which is constituted by provisions from additional corporate board responsibilities to criminal penalties and provides for the Securities and Exchange Commission to oversee the implementation of the law. The need of ensuring the existence of an ethical workplace is not only to implement a moral conduct within the firm but also to procure whatever advantage that the firm may achieve when there is a belief among the potential consumers and employees that the company is ethical. Creation and gradual implementation of a proper code of conduct is a method that is commonly adopted by managers to ensure an ethical workplace. ... The Securities and Exchange Commission which was supposed to implement the act created a new agency called Public Company Accounting Oversight Board to review matters regarding accounts of all public companies (cited in The University of Cincinnati College of Law, 2002). The sole intention of the act was to prevent fraud and scandals within the corporate so that the nation’s security markets and economy remain strong. Corporate are entitled to submit clear and accurate financial reports and it defines the interaction between external auditors and audit committees. There are severe penalties and punishments if a violation of the law is detected. As Kuschnik (2008) points out, the section 302 of the act provides that CEO and CFO of the companies must certify and approve the authenticity of the financial reports of their company. Planning is the key part of making the data of the company compatible with the law. It is significant for taking future steps freely and to discuss the project with the auditors and the audit committee. The planning phase is where varying opinions can be put into consideration and a commonly accepted resolution can be formulated. Planning can be executed in a sequential pattern. Staffing has to be done in order to carry out the compliance process. The task should be divided into portions that can be completed in a limited time framework. Selection of a recognized framework for testing and business systems and procedures also prove to be cogent. Examine risk-tolerance and impacts of a possible control failure on an organizational level. Complete outsourcing, co-sourcing, direct lining or utilizing existing staff can be used to completing the process. The key advancement that resulted from the act was enhanced investor confidence and more