Impact of Unethical Behavior

Topics: Audit, Finance, Financial audit Pages: 2 (554 words) Published: February 4, 2013
Impact of Unethical Behavior Article

Potential acts leading to unethical practices and behavioral in accounting is evident. These acts are in violation of the Sarbares Oxley Act of 2002 (SOX). A recent article on the student website is reviewed to identify potential factors leading to unethical practices and behavior. The article analyzed is called “Becoming a More Relational Firm in the Post-Sarbans-Oxley Era”.

As expressed by the article, the effects of SOX has been considered by companies in which use auditing services as their main source of business (Jelinek, Jelinek, 2010). SOX has caused agencies to have a strong battle obtaining clientele. The SOX act has changed provisions in which disallow an agency to sale services directly to company personnel (Jelinek, Jelinek, 2010). This has resulted in agencies having to go an outside committee to sale services or products (Jelinek, Jelinek, 2010). The act also requires the auditor agencies to resale from services after 5 years and disallows them to seek employment with a previous client within of a year of last audit (Jelinek, Jelinek, 2010). These new rules have caused the agencies to have very strict rules of operation procedures. With the information obtained in the article, is has been relevant that auditing agencies are having difficulty rendering services. So if auditing agencies are not doing auditing then companies are use internal auditors. With internal auditors the unethical practices and behavior chances have increased. These are however situations even with an auditing agency that can lead to unethical practices and behavior. Thus misuse of funds received, is a type of unethical practice. Potential scenarios in which unethical practices and behavior can be encountered is identified. When funds are used for items other than authorized, the funds use is unethical. A situation that could lead to misuse is when a company is short of funds in one area and to finance another activity, the company...
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