Ethics commonly refer to the rules or principles that govern what is considered 'right' and 'wrong' in regard to ones conduct. However, in the corporate businesses world ethics in accounting seems to be an after thought. With the highly publicized accounting scandals of WorldCom, Enron, and Tyco many business have adopted new policies, procedures along with internal controls to reduce the risk of litigation.
In 2002 the government stepped in and created the Sarbanes-Oxley Act. The Sarbanes-Oxley Act was created to protect investors from corporate accounting fraud. The Sarbanes Oxley Act has helped to regulate an organization's financial information by covering issues such as establishing a public company accounting oversight board, auditor independence, and corporate responsibility and enhanced financial disclosure. It was designed to review the dated legislative audit requirements, and is considered one of the most significant changes to United States securities laws since the New Deal in the 1930s.
The ACT gives additional powers and responsibilities to the U.S. Securities and Exchange Commission. The Act changed accounting practices in regards to the requirement on reporting, and disclosures. The ACT also offered protection to corporate executives who retaliate against the whistleblowers who provided information in an investigation. Corporate executives who retaliate against the whistleblowers may be faced with up to 10 years in prison.
Vice president Jared Bowen believed he was covered under the Whistleblowers Act when he provided information to Wal-Mart that aided a probe into Vice Chairman Thomas Coughlin. The probe found that Thomas Coughlin received as much as "$500,000 in unauthorized payments that seemed to have been obtained through the reporting of false information on third-party invoices and company expense reports, according to a March company filing with the Securities and Exchange Commission" (Stephen Taub). Jared Bowen soon found that Wal-Mart did not consider the...