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Sarbanes-Oxley: Issue of corporate executive responsibility for financial statements

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It has been said that many corporate executives seemed to believe that it was their job not to produce accurate financial statements for the auditors to certify, but rather to bully the auditors into certifying as aggressive a set of financial statements as possible. Explain why you agree or disagree with this statement.

Prior to the passage of Sarbanes-Oxley, CEOs and CFOs would testify that they did not know that their companies' financial statements were incorrect and thereby had plausible deniability. Explain how Sarbanes-Oxley addresses this situation.

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Solution Summary

The issues of corporate executive responsibility for financial statements for Sarbanes-Oxley is examined.

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Every organization faces uncertainty in many forms; some uncertainties present challenges to the organization and other uncertainties present opportunities. Risk management systems allow organizations "to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value" (Flaherty, Maki, et. al., 2004).

Changes in technology, federal and state regulations, and economic uncertainties all affect the risks organizations must take to remain competitive and to offer maximized ...

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