The problem to be investigated is the effect and consequences of the Sarbanes-Oxley Act. The main purpose of the Sarbanes-Oxley Act of 2002 was to improve the public trust and confidence in financial reporting provided by public companies and increase in the transparency of their reports (Jennings, 2012). This paper will investigate the issues covered by SOX, additional costs due to the establishment of Sarbanes- Oxley Act and its policies, and finally list of government practices that could be effective in examining, auditing, and holding accountable public companies before their investors, shareholders, and government.
List all of the issues and activities you see that are now covered by SOX that could, or should have been handled as ethical issues and resolved voluntarily.
In order to help companies solve their internal problems, the Sarbanes-Oxley Act (SOX), established a quasi-government entity, the Public Company Accounting Oversight Board (PCAOB, but called Peek-a-Boo), to (1) oversee public companies auditing, (2) establish auditing reports standards, (3) rules for public companies, (4), and investigate and enforce compliance of public accounting firms. (Jennings, 2012). In any profession, accountability is one of the key elements to ensure quality and transparency of the services provided. The lack of accountability or personal responsibility by the auditors that were responsible to audit and have unbiased reports is one of the ethical issues that could have been solved by the companies themselves. Auditor independence is another activity that could have been handled voluntarily. According to Jennings (2012) the SOX established code of ethics for public accounting firms. Some of the services that accounting companies that audit public companies are prohibited to do are; provide bookkeeping services for the same public companies that they are auditing, appraisal and valuation services, conduct an internal audit, outsourcing, broker services, and...
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