Ethics Article Review
Ethics Focuses on the passage of the groundbreaking Sarbanes-Oxley Act of 2002. Impact of the regulations on public corporations; Issues regarding the publicized corporate accounting scandals such as Enron, Adelphia Communications and HealthSouth; Need for publicly-held companies to have an internal code of ethics .
Ethical and moral values provide a foundation to society on how to function, live, and work within the society. Determining the degree to which business has complier with established standards has presented a real problem. As seen through corporate corruptions such as Enron, without an ethical foundation, organizations collapse. In the article "Accounting issues at Enron", Reinstein and Weirich (2002) stated that "many executives at Enron and Andersen focused on the "letter of the law" rather than on whether the proposed accounting appeared ethical and fair" Indeed, the purpose of ethics in business is to direct individuals to abide by code of conduct that help increase and maintain public confidence in their products and services.
In recent years, accounting scandals have caught public attention and forced companies to examine their ethical practices in this area. Since the introduction of Sarbanes-Oxley Act of 2002, (SOX) legislation turned corporate America on its ear. The article titled, "Corporate Executives and Auditors Try on SOX", Tom Diana (2005) examines the effects SOX has on both senior management and accounting examiners. There is much resentment felt by large corporations due to this new regulation from the government. However, this law resulted as a necessity from the public disgraces of companies like Enron, WorldCom, and Tyco purposely-misrepresenting company performance statements (Albrecht, Stice, Stice, &. Swain, 2005, chap 1).
One must comprehend the regulations set forth by the SOX ruling to understand the implications for businesses. SOX law instituted shareholder protection in the form of a Public...