Please help with the following questions. Thank you.
1. What is the significance of the Sarbanes-Oxley Act? From your perspective what law(s) have had the greatest impact on organizational ethics? How? Please explain.
2. What do you consider the 3 most important ethical issues or dilemmas encountered by modern day business? Please explain and give examples of each. How do laws, societal changes in values and globalization present challenges for corporate business ethics?
1. The significance of the Sarbanes-Oxley Act (SOx) lies in the fact that certain common sense financial reporting items were finally addressed to sew up loopholes that greedy executives had leveraged for years for personal gain at the expense of investors. For example, two of the laws implemented in SOx include auditor rotation and executive accountability. These two items were overlooked for years, but those in the accounting department new if the inherent weaknesses and worked on knowing that at any time, a greedy executive could leverage these loopholes to his or her advantage.
The auditor rotation portion of the SOx act had a great impact on organizational ethics. It basically states that a public firm must not only use independent auditors to review the books, but that it must rotate auditors every certain number of years. Again, this seems like a good common sense item, but it was overlooked for decades.
The executive accountability law also had a great impact on organizational ethics. In essence, exectuvies could no longer use the excuse 'I didn't know what the accounting department was doing.' They had to, once and for all, sign off on all the financials. This led to greater transparency in reporting and greater involvement by executives who might have been more careless previously.
2. The three most important ethical issues in modern business include:
1) Hiring based upon networks instead of abilities.
The significance of Sarbanes-Oxley Act is determined. The three most important ethical issues or dilemmas encountered by modern day businesses are given.