In recent years, accounting scandals have captured 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. In the article titled, Corporate Executives and Auditors Try on SOX, author Tom Diana examines the effects SOX has on both senior management and accounting examiners. There is much resentment felt amongst the corporate world due to the financial and personnel burden SOX places on companies; however, this law resulted as a necessity from the publicized corporate accounting scandals such as Enron, WorldCom, and Adelphia Communications, and HealthSouth. This paper will examine the impact of SOX and ethics on the accounting practices for U.S. businesses.
SOX was signed in July 2002, by President George W. Bush. The authors of the law are Paul Sarbanes and Michael Oxley. Sarbanes is the longest serving U.
S. Senator in Maryland history, having won his fifth term in 2000. He received his undergraduate degree from Princeton University, and a Harvard law degree. Sarbanes is the senior Democrat on the Senate Banking, Housing, and Urban Affairs Committee. Representative Michael Oxley was elected to the Ohio House in 1972 at the age of 28. Oxley has his undergraduate degree from University of Miami in Oxford, Ohio, and received a law degree from the University of Ohio. He is now the chairman of the House Committee of Financial Affairs. The largest part of the Sarbanes Oxley Act is not all the sections that it covers in the law, not who signed it, or even authored it; it is how corporations will comply to this extensive piece of legislation.
One must comprehend the regulations set forth by the SOX ruling to understand the implications for U.S. businesses. SOX law instituted...