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Acconting Ethics

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In today’s business world , the characterized as the information age where media has extended its boundaries to reach even the smallest population across the globe, the board of directors of all corporations must go to extreme measures to maintain due diligence in every aspect of their duties in managing corporations. Any corporate transgressions can be immediately disclosed to the world through television, radio or internet. These perceptions of misconduct, whether true or false, can greatly affect the corporations’ position. Because of the critical affect that inappropriate conduct on the part of directors and corporate management has on the future of the corporation in addition to the adverse effects on all of its stakeholders, the United States government passes the Sarbanes-Oxley Act of 2002. This act was initiated in order to create a specific framework for auditing all functions of Board members to circumvent corruption as well as to encourage improvements in the stock market. Improving the confidence of stockholders in the United States was also a major consideration in the implementation of this legislation (Thompson, 2005).
The passage of the Sarbanes Oxley Act of 2002 has developed a specific set of auditing tools and guidelines for directors. Directors now have a legal responsibility to follow these guidelines and their corporate bylaws or, as evidenced by the aforementioned scandals, face public scrutiny as well as criminal and civil action. According to John Nash, president of the National Association of Corporate Directors, directors are now being mandated to “be more accountable, to hold executives more accountable” to align themselves with the shareholders who actually employ them (Potts and Swoboda, 1992, p. 6). Boards of Directors must utilize the following resource committees to help to keep a balance of organization within a corporation:

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