Week 5 Reflection

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M E M O R A N D U M

Re:Week 5 Reflection ________________________________________________________

This week marks the final week for this course. Team 5 has discussed the ethical implications involved with accounting principles and the importance of having regulations in place in order to maintain accuracy. The following addresses some situations that may lead to unethical accounting practices as well as the effects of such behavior. The Sarbanes-Oxley Act is also addressed because of its important role of regulating accounting practices. There are certain circumstances that can lead people to perform unethical accounting practices. If a person is dealing with financial strains in his/her personal life, has the ability and knowledge, it is possible to manipulate financial information of a corporation, this could lead to temptation. Mere greed is another motivator in unethical behavior. In any case, a person, or persons, convinces themselves that what they are doing is okay and they deserve it. Some of the effects for companies and people who do unethical behavior regarding Sarbanes-Oxley Acton the financial statements will suffer huge consequences. It is also based on the section of the act that may be out of compliance. Non-compliance penalties may range from the loss of D&O insurance and also the loss of exchange listings and to multi-million dollars in fines and imprisonment. This could affect the lack of investor confidence also. The CFO or CEO who may submit the incorrect certification may be subject to a fine to $1 million dollars and/or imprisonment for up to 10 years. Also if the incorrect certification was submitted “willingly” then the fine can increase up to $5 million dollars and/or imprisonment could increase to 20 years. The Sarbanes-Oxley (SOX) Act was enacted to protect employees who may want to report misconduct in the workplace from retaliation, and also to protect investors from fraudulent accounting practices used by...
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