Sarbanes-Oxley Act of 2002
Like all structures, accounting requires a strong foundation. For accounting, part of that foundation is the ethical behavior of those who practice its rules. Ethics refers to a code or moral system that provides criteria for evaluating right and wrong behavior: Investors, creditors, government, and the general public rely on ethical behavior among those who record and report the financial activities of businesses. A lack of public trust in financial reporting can undermine business and the economy.
The dramatic collapse of Enron in 2001 and the dismantling of the accounting firm Arthur Andersen in 2002 severely shook investors’ confidence in the stock market. Some questioned the creditability of corporate America and well as the accounting profession.
Public outrage over a number of accounting scandals at high-profile companies increased the pressure on lawmakers to pass measures that would restore creditability and investor confidence in the financial reporting process. These pressures resulted in the issuance of the Public Company Accounting Reform and Investors Protection Act on 2002, commonly referred to as the Sarbanes-Oxley Act (SOX), named for the two congressmen who sponsored the bill.
On July 30, 2002 President Bush signed into law the Sarbanes-Oxley Act of 2002 (H.R. 3763). This law affects the accounting profession like no bills enacted since The Security Exchange Acts of 1934 and the Securities Act of 1933. It is a federal law that mandates certain practices in financial record keeping and reporting for corporations.
The Sarbanes-Oxley Act provides for the regulation of auditors and the types of services they furnish to clients, increases accountability of corporate executives, addresses conflicts of interest for securities analysts, and provides for stiff criminal penalties for violators. These increased requirements have dramatically increased the need for good accounting and, at the same time, highlighted the value of accounting information to investors and creditors.
This law contains eleven provisions (Titles I-XI) that place requirements on all U.S. public companies and their management and boards of directors, as well as public accounting firms. A number of provisions also apply to privately held companies, such as the willful destruction of evidence to impede a federal investigation.
Please familiarized yourself with the bill. Use the link below to assist in completing this assignment: https://www.congress.gov/bill/107th-congress/house-bill/3763
In addition to the Sarbanes-Oxley act, the United States Occupational Safety and Health Administration (OSHA), administers and enforces the Whistleblower provisions of more than twenty (20) statutes including financial reform. These statutes protect employees from retaliatory actions administered by employers. You can read more here: https://www.whistleblowers.gov/
Important as such legislation is in supporting the ethical foundation of accounting, it is equally important that accountants themselves have their own personal standards for ethical conduct. Accountants need to develop their ability to identify ethical situations and know the difference between right and wrong in the context of accounting topics. One of the keys to ethical decision making is having an appreciation for how your actions affect others.
When you face ethical dilemmas in your professional life (and also personal life), you can apply the following framework as you think what to do:
I. Identify the ethical situation and the people who will be affected (the stakeholders).
II. Identify prevailing frameworks (laws, standards, codes, etc.) to use as a guide.
III. Specify the options for alternative courses of action.
IV. Understand the impact on the stakeholders.
V. Decide on the best course of action.
Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.
Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.
This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.
To be inviting and polite is indistinguishable, and politeness requires an insightful and amicable activity against others. Axioms are notable that gracious “pay of graciousness is the main thing to win everything”. Correspondence staff ought to consistently remember this. The accompanying standards may assist with improving courtesy:Preliminary considering correspondence with family All glad families have the mystery of progress. This achievement originates from a strong establishment of closeness and closeness. Indeed, through private correspondence these cozy family connections become all the more intently. Correspondence is the foundation of different affiliations, building solid partners of obedient devotion, improving family way of life, and assisting with accomplishing satisfaction (Gosche, p. 1). In any case, so as to keep up an amicable relationship, a few families experienced tumultuous encounters. Correspondence in the family is an intricate and alluring marvel. Correspondence between families isn’t restricted to single messages between families or verbal correspondence.
It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.
Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>
