Ethics Article
The article I choose to read, Corporate Executives and Auditors Try on SOX, is about the effects of the ground breaking Sarbanes- Oxley Act (SOX) of 2002, (also known as the corporate responsibility act) and the impact that it has on public corporations. The article also discusses the highly publicized corporate scandals of Enron, WorldCom, HealthSouth, and a few others.
The article is related to the reading from week one because it discusses the regulations set forth by the SOX and the issue of ethics in the world of accounting. The purpose of ethics in the world business is to direct business people on how to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services. In the accounting field, the AICPA maintains and enforces a code of professional conduct for public accountants. The Institute of Management Accountants (IMA) and the Institute of Internal Auditors (IIA) also maintain a code of ethics. Professional accounting organizations recognize the accounting profession's responsibility to provide ethical guidelines to its members (Smith & Smith, 2003, 1).
Accounting is formally defined as a system for providing “quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions (Albrecht, Stice, Stice, & Swain, 2005, 1). Businesses use accounting to analyze transactions, perform booking tasks, and compile information so that they could evaluate the health and performance of their business. Accounting is called the language of business because people involved in business need to understand it. If organizations purposefully misinterpret the “language” of accounting, they are committing fraud. In order to maintain ...