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    Impact of Sarbanes-Oxley Act on Accountants

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    How has the Sarbanes-Oxley Act impacted the professional and ethical standards of accountants? Explain.

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    Please see attached a word document. See highlighted sections.

    Sarbanes Oxley Impact on Accountants Ethics

    Ethical Values In Accounting
    "The biggest contribution the government has made is the creation of the Sarbanes-Oxley act, which intends to take away unethical behavior from firms by putting all auditing into very strict rules:

    "An Act to protect investors by improving the accuracy and reliability of corporate disclosure."

    There are two ways in which the act helps a move back to the values and principles of Guardian morality. The first is fairly obvious: The restrictions in section 201 on the provision of any non-audit services to audit clients that the Public company Accounting Oversight Board (PCAOB) determines to be impermissible, drastically reduce the potential rewards of following Commercial norms.

    The second way in which Sarbanes-Oxley encourages movement back toward the traditional professional values of Guardian morality is perhaps less obvious. The establishment of the PCAOB brings with it a separation of Guardian and Commercial considerations at the institutional level. The act gives the PCAOB the authority to set the following (for the audits of public companies):

    - Auditing standards
    - Quality control standards
    - Ethics standards, and
    - Independence standards.

    Furthermore, the PCAOB shall conduct inspections of registered firms, conduct investigations, and discipline firms.(3)

    The universities are being a big part of the movement by having greater number of classes that teach ethics and good decision-making. School are teaching that the purpose of ethics in business is to help man and human to follow a common business code of conduct, and help them with their decision making, after all there will be thousand chances that they the young professionals may find in which they may choose an unethical behavior. After all most unethical behavior in the past couple of years is result of wrong interpretation of existing accounting rules: When PCAOB board member Charles D. Niemeier spoke at the AICPA Annual SEC and PCAOB Conference in December 2004, he said: "The most disturbing aspect of Enron and similar scandals was not that what was done was wrong, but that what was done was right. Enron did not ignore the rules and regulations, but instead took them and used them to achieve results that were never intended."(4)

    After Universities, ethical behaviors is pushed along by the AICPA which 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. This is an important movement since we see accounting organizations recognizing that profits are not the only purpose of accounting but getting it in an ethical way is.

    It was scary the direction that accounting was taking, when firms over and over again, used bad accounting for their benefits. It became important for ethical values to gain importance once again, and to put into the minds of young accountants that profit was not the only goal, and greed is not the way to assure success, instead increasing wealth by following ethical standards was. "

    Work Cited

    Flegm, Eugene H.. "Accounting at a Crossroad." The CPA journal December 2005 27 June 2006 http://acct.tamu.edu/smith/ethics/EthicsPowerPoint.ppt
    Source -- http://articles.directorym.com/Ethical_Values_In_Accounting-a800313.html
    Also visit -- http://www.pcaobus.org/index.aspx

    The SOA is a large and complex statute that contains eleven titles. Title I creates a new regulatory agency to oversee auditors' work, the Public Company Accounting Oversight Board (PCAOB). Title II deals with auditor independence and auditor conflicts of interest. These two titles contain the ...

    Solution Summary

    2300+ words give a detailed view on the impact the Sarbanes-Oxley Act has had on professional standards and ethics in the field of accounting.