Essay About Accounting Ethics And Directive Of The Legislation Wasto Control Fraud

Accounting Ethics and the Sox Act of 2002
Accounting Ethics and the Sox Act Of 2002     After Enron and companies created financial scandals and stole funds from many orgovernment created the Sarbanes-Oxley Act of 2002.  The directive of the legislation wasto control fraud in major public traded companies and to make the managers, owner andeven accountant liable for the financial actions and report of their companies (Wegman, Jerry).     One of the main ethical issues tackled was final responsibility for company actions, ownerand managers could no longer plead ignorance of what went on within their own house.Now whether a manager or owner knew of fraud or not and it was committed he would be the oneto hold the blame and pay the penalty.  This action forced management and owners to learnto know what was going on and being down by their employees.  This was the bosses would make sure the new regulations where followed.     Another major point of the Sox Act was the call for external and internal audits to be donein all public traded companies.  The cost of this alone will make some companies decide to stayprivately owned.  Due to conflict of interest outside account firms must be hired to do externalaudits.  These audits are subject to government regulations and monitoring.  The accounting field isnow also held to higher standers and face fines and penalties if and infractions are found. Penalties include fines and jail time for any fraud and owners, manager and accountants are theones held liable.      Other issues the Sox Act covered was to supply legal protection for whistleblowers thatreported fraud in the companies they were employed by.  Another rule is that any financial