Enron resulted in significant legislation to prevent future ethical misconduct. Do you think that Sarbanes Oxley has been effective in managing the risks exposed through Enron, Arthur Anderson, Worldcom, etc.?
Sarbanes Oxley Act of 2002 (SOX) has been effective in improving fraudulent reporting. It has much lower impact on the misappropriation of assets. No law will be able to suppress all human inclination to take advantage of organizations with ethical misconduct. The law made it harder to mis-report the company's financial situation and made the consequences more extreme. Here are a few of the reasons I believe SOX was effective.
In the short run, the law was effective in getting c-level executives to take the financial reports seriously. What is the evidence of this? The ...
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