Effect of Unethical Behavior Article Analysis Essay

The Sarbanes-Oxley mould, passed in congress in 2002 is designed to protect investors from the potential of fraudulent incorporated history activities. This act strictly mandates reform, aimed directly to prevent fraud and mend corporate financial disclosures (INVESTOPEDIA, 2012).As a result of several assertion shaking investor accounting scandals that occurred during the late 90s which involved high profile corporations much(prenominal) as Enron, WorldCom and Tyco, a much required overhaul regarding financial statements and regulative standards laid the foundation for the Sarbanes-Oxley Act. This act is making the accounting world to a greater extent accessible to others for auditors to come in and help in checking the books. It will take up the executives and directors accountable for the inbred controls of the company especially with the threat of imprisonment if the midland controls are not maintained.The act promises that a checks and balance internal auditing of the accounting cycle for the company and investors to keep their assets in check. The role of internal audits is to ensure that Institute of informal Auditors Standards for the Professional Practice of Internal Auditing Standard 300 Scope of Work be followed. The scope of the internal audit should encompass the examination and evaluation of the adequacy and effectiveness of the perspectivements system of internal control and the quality of performance in carrying out assigned responsibilities (M. Wood Company, 2012).The internal audit standards are to revue the dependability and integrity of financial and operating information and the resource macrocosm used to identify measure and classify those reports. The standard requires the system be reviewed to ensure compliance with those policies, plans, procedure, laws and regulations which may have a huge match on operations and reporting. The standard is used to review the methods in frame to safeguarding assets and verify that the assets protected exist. The final purpose of the standard is to appraise the saving and the efficiency with the means that are employed by a corporation.It is consequential to note that policies and rules are also enforced to uphold the Sarbanes-Oxley Act. Sections 302, 401, 404 and 805 in item address key requirements as it pertains to effecting financial statements. Section 302 requires senior managers to demonstrate the accuracy of the reports along with establishing internal controls are set in place for the purpose of increasing report accuracy, ensuring honesty and ultimately providing financial resistance for the investors.Section 401 ensures that statements may not contain fraudulent information. Section 404 provides for the necessity rules for annual reporting as well as addresses management auditing structures. Lastly, dent 805 provides the guidelines for federal sentencing relating to criminal fraud and obstruction of justice. (Hazels, Nov/ regrets) A very histori c question that should be asked is how well main stream America understands the Sarbanes-Oxley Act of 2002 and how it has effected them? Another pressing area to uncover is how it has affected the US economy over the past ten years? Lastly, it would be arouse to understand how US companies interface globally with countries not held to the same standards.ReferencesHazels, B. (Nov/Dec 2010). Eight Years After The Fact Is SOX Working? A play At The Brooke Corporation. Journal of Business Case Studies, 6(6.6), 19-29. Invesotopedia. (2012). Sarbanes-Oxley Act Of 2002 SOX. Retrieved from http//www.investopedia.com/terms/s/sarbanesoxleyact.aspaxzz2BCoqABsQ M. Wood Company. (2012, November 1). The role of Internal Audit in Complying with Sarbanes- Oxley. Retrieved from http//www.mwoodco.com/value/Internal_Audit_7-03.pdf