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Sarbanes-Oxley Act and Section 803

Do we really need to have the CEO and CFO sign off on the quarterly and annual reports? What's wrong with delegating this responsibility to another person in the organization?
Do you agree with Section 803 of SOX? Should any judgement resulting from securities fraud be nondischargeable? Why or why not?

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Do we really need to have the CEO and CFO sign off on the quarterly and annual reports? What's wrong with delegating this responsibility to another person in the organization?

-- We absolutely need the top two executives to personally sign off on the quarterly and annual reports. We want the top two people to be personally accountable for the statements, for a few different reasons. All of the reasons are based on the same premise, which is accountability. When Enron collapsed, the problem is that the company was so huge, that it affected the economy due to its immediate impact on the stock market. People lost jobs, pensions, benefits, and in many cases, investors actually lost their life savings. The top Enron executives claimed many times throughout their trials that in many instances, they simply "didn't know" what was going on. There was a great deal of legislation that came from the accounting scandals during that time period, and SOX was one of the main forms of legislation. When SOX ...

Solution Summary

This solution discusses SOX law and if the executives should be required to sign an affidavit verifying the validity of the financial statements. This solution also discusses Section 803 and its legitimacy.

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