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 or

government created the Sarbanes-Oxley Act of 2002.  The directive of the legislation was

to control fraud in major public traded companies and to make the managers, owner and

even 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, owner

and 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 one

to hold the blame and pay the penalty.  This action forced management and owners to learn

to 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 done

in all public traded companies.  The cost of this alone will make some companies decide to stay

privately owned.  Due to conflict of interest outside account firms must be hired to do external

audits.  These audits are subject to government regulations and monitoring.  The accounting field is

now 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 the

ones held liable.

     Other issues the Sox Act covered was to supply legal protection for whistleblowers that

reported fraud in the companies they were employed by.  Another rule is that any financial