Effect of Unethical Behavior Article Analysis
In the Accounting profession there are many situations that lead to the unethical behavior in this profession. Situations such as the misuse of company funds, exaggerating the value of a company’s assets, insider trading, and inflating revenues. When you choose to become an Accountant you take on a great deal of responsibility not only to the corporation you are employed through but more importantly the general public. In the past we have witnessed some of Americas high ranking publically traded corporations crumple due to shady accounting practices. The collapse of companies like Enron destroyed the lives of thousands of hard working people who lost everything. Enron literally shook the financial world with their use of unethical accounting practices, hiding losses, claiming profit from assets with no profit at all as well as numerous write offs. In response to this tragedy on July 30, 2002 President Bush signed the Sarbanes-Oxley Act. This act set new standards for publicly traded corporations, containing a total of eleven sections that protect shareholders and the public from fraudulent accounting practices. The SEC is responsible for overseeing, administering and enforcing this act by setting deadlines for compliance, setting requirements, standards for internal controls, audit, disclosure and ethical requirements. I believe one of the largest effects of the SOX Act is section 301 which refers to the audit committees complying with these requirements. The sections contained within section 301 deals heavily with commission rules, responsibilities relating to public accounting firms and funding. This past year marked the 10 year anniversary of the Sarbanes-Oxley Act of 2002 and much has been said on whether or not we should loosen up the reigns of this act. Many today believe that the act has been widely...