Article Review - Sox Act
University of Phoenix Material
Article Review Format Guide
MEMORANDUM
UNIVERSITY OF PHOENIX
DATE: October 14, 2013
TO:
FROM:
RE: Punishing the Innocent: The Sarbanes-Oxley Act
Hunter, B. (2007). Punishing the innocent: The Sarbanes-Oxley Act. Retrieved from www.fee.org/files/docLib/0703hunter.pdf
ARTICLE SYNOPSIS
Hunter’s article examines how the Sarbanes-Oxley Act (SOX Act) is too stringent and gives too much power over companies to governing bodies, i.e. the Public Company Accounting Oversight Board (PCAOB) (Hunter, 2007). It discusses how the SOX Act is unfair to domestic and foreign and small and large companies, their shareholders, and the public. The piece explains how the Act may compel some companies to use unethical actions to conduct business and prevent accruing penalties (Hunter, 2007).
LEGAL ISSUE
The article exposes how the SOX Act imposes a never-ending strain of compliance obligations that have not been helpful to businesses, but has drained the companies of revenue and time (Hunter, 2007). Hunter explains that instituting the PCAOB allows the board to inflict massive penalties on higher-ups within a business, i.e. CEOs and CFOs, through the SOX Act. According to Hunter (2007), “the Board is permitted to make any changes it wishes, which places companies in the position of forever trying to hit a moving target”, (Punishing the Innocent: The Sarbanes-Oxley Act, p. 24, para. 2). Because of this, the author believes the Sarbanes-Oxley Act persuades companies to act unethically by conducting some business verbally in-person or over the telephone, thus negating the need to report this information to the PCAOB or SEC and all but ignoring the SOX Act (Hunter, 2007).
Foreign companies also face the brunt of the negative aspects of the SOX Act. Companies on the U.S. exchange lists already endure requirements placed on them by their own countries, and the SOX Act only burdens them more (Hunter,
Article Review Format Guide
MEMORANDUM
UNIVERSITY OF PHOENIX
DATE: October 14, 2013
TO:
FROM:
RE: Punishing the Innocent: The Sarbanes-Oxley Act
Hunter, B. (2007). Punishing the innocent: The Sarbanes-Oxley Act. Retrieved from www.fee.org/files/docLib/0703hunter.pdf
ARTICLE SYNOPSIS
Hunter’s article examines how the Sarbanes-Oxley Act (SOX Act) is too stringent and gives too much power over companies to governing bodies, i.e. the Public Company Accounting Oversight Board (PCAOB) (Hunter, 2007). It discusses how the SOX Act is unfair to domestic and foreign and small and large companies, their shareholders, and the public. The piece explains how the Act may compel some companies to use unethical actions to conduct business and prevent accruing penalties (Hunter, 2007).
LEGAL ISSUE
The article exposes how the SOX Act imposes a never-ending strain of compliance obligations that have not been helpful to businesses, but has drained the companies of revenue and time (Hunter, 2007). Hunter explains that instituting the PCAOB allows the board to inflict massive penalties on higher-ups within a business, i.e. CEOs and CFOs, through the SOX Act. According to Hunter (2007), “the Board is permitted to make any changes it wishes, which places companies in the position of forever trying to hit a moving target”, (Punishing the Innocent: The Sarbanes-Oxley Act, p. 24, para. 2). Because of this, the author believes the Sarbanes-Oxley Act persuades companies to act unethically by conducting some business verbally in-person or over the telephone, thus negating the need to report this information to the PCAOB or SEC and all but ignoring the SOX Act (Hunter, 2007).
Foreign companies also face the brunt of the negative aspects of the SOX Act. Companies on the U.S. exchange lists already endure requirements placed on them by their own countries, and the SOX Act only burdens them more (Hunter,