Why Did The Sarbanes Oxley Act Fail
Sarbanes-Oxley Act
Matthew Greenwell
Professor Eric Weitner
XACC-291
January 23, 2015
In any society there will be people that will do anything to succeed in life which includes breaking the law or even finding loop holes within laws. Now the Sarbanes-Oxley Act is a federal law to try and protect shareholders and the general public from fraudulent practices but in the end it is just a law and all laws can be broken. Some critics have pointed out the “Madoff scandal as a prime example of how the Sarbanes-Oxley Act has failed” (Fuller, 2009). But just because a system fails doesn 't mean you give up or stop it means that you need to perfect the system. So where does the government go from here? Do they make more laws or add more
paperwork? I believe we do need to continuously improve our laws so that it continuously fits the business models of America companies and their interests. The Sarbanes- Oxley Act has been able to shake up companies and have them start looking at their financial reports more and who is doing them. Companies need to go back to basics, ethics. “If the company would emphasize ethics and honestly, the profits may not be as substantial but at least you know them to be true” (Fuller, 2009). “This sets the groundwork for a company to prosper for many years as an ethical honest corporation rather than burn out quickly like a profit driven supernova” (Fuller, 2009). I any country the people 's ethics determine the moral compass of that society and if we enact laws and give people the authority to enforce those laws we can change our country for the better. The Sarbanes-Oxley Act is a piece of legislation that was enacted to help prevent fraudulent financial reporting and to provide assurance to investors. The law has many features that will help to protect the public from fraud. There are many critics of the act, but in the long run, it will have many benefits and advantages for the government, companies, and the public and those will outweigh the disadvantages and challenges.
References
Fuller, G. (2009, March 9). The Effectiveness of Sarbanes-Oxley on Fraud Prevention. ezinearticles. Retrieved from http://ezinearticles.com/?The-Effectiveness-of-Sarbanes- Oxley-on-Fraud-Prevention&id=2081849
Matthew Greenwell
Professor Eric Weitner
XACC-291
January 23, 2015
In any society there will be people that will do anything to succeed in life which includes breaking the law or even finding loop holes within laws. Now the Sarbanes-Oxley Act is a federal law to try and protect shareholders and the general public from fraudulent practices but in the end it is just a law and all laws can be broken. Some critics have pointed out the “Madoff scandal as a prime example of how the Sarbanes-Oxley Act has failed” (Fuller, 2009). But just because a system fails doesn 't mean you give up or stop it means that you need to perfect the system. So where does the government go from here? Do they make more laws or add more
paperwork? I believe we do need to continuously improve our laws so that it continuously fits the business models of America companies and their interests. The Sarbanes- Oxley Act has been able to shake up companies and have them start looking at their financial reports more and who is doing them. Companies need to go back to basics, ethics. “If the company would emphasize ethics and honestly, the profits may not be as substantial but at least you know them to be true” (Fuller, 2009). “This sets the groundwork for a company to prosper for many years as an ethical honest corporation rather than burn out quickly like a profit driven supernova” (Fuller, 2009). I any country the people 's ethics determine the moral compass of that society and if we enact laws and give people the authority to enforce those laws we can change our country for the better. The Sarbanes-Oxley Act is a piece of legislation that was enacted to help prevent fraudulent financial reporting and to provide assurance to investors. The law has many features that will help to protect the public from fraud. There are many critics of the act, but in the long run, it will have many benefits and advantages for the government, companies, and the public and those will outweigh the disadvantages and challenges.
References
Fuller, G. (2009, March 9). The Effectiveness of Sarbanes-Oxley on Fraud Prevention. ezinearticles. Retrieved from http://ezinearticles.com/?The-Effectiveness-of-Sarbanes- Oxley-on-Fraud-Prevention&id=2081849