Ethical Behavior Assignment

Topics: Enron, Generally Accepted Accounting Principles, Balance sheet Pages: 4 (402 words) Published: April 25, 2015

Ethical Behavior
Hilda Hoyt
April 23, 2015
Dr. Johnny Hamblin
Ethical Behavior
The question asked, did the Sarbanes-Oxley Act make any difference and why or why not do I think this way. This Act made a big difference in the ethical behavior of companies. In the past some companies felt that they could take any liberty and show it in any way they wanted on their financial statements. For example, they need another tax break, so they would get an upper management a new car, when they had just purchased one the previous year. This one had not depreciated that much, but a tax write off was needed. This can be viewed as ethical wrong. Why not look at other ways to put you into another tax bracket, such as improve your employee work areas or improve the lunch break room. Sadly, many owners do not think of their employees and look at their work environment as possibilities as an opportunity for a tax write- off. This type of non-caring attitude is what brought about labor laws to make a work environment safer. In the Enron’s situation there was an attitude of “I did not know” or “I was only doing my job”. The optimism of the company's chairman, Mr. Lay, occurred even while Ms. Watkins, who was a senior Enron employee, explicitly warned him that several years of improper accounting practices threatened to bring down the company. This suggests that Mr. Lay was on notice about the company's accounting problems even while he was assuring employees and the investment public that Enron's stock would rebound (Cohan, J.A., 2002). This act made companies accountable for their actives financially. They had to start showing that the trials balance, cash flow, income, and retained earnings statements balanced with each other. It prevented the masking of actual financial records from companies, and gained back the confidence that the economy needed in major companies. This law set into action high penalties for fraud in accounting actions, and...
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