...Sarbanes- Oxley Act of 2002 (SOX) * The Public Company Accounting Reform and Investor Protection of 2002. Protects shareholders and the general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures. * Effective financial reporting depends on sound ethical behavior. Solving An Ethical Delimma * Recognize an ethical situation and the ethical issues involved. Use your personal ethics to identify situations and issues. Some businesses and professional organizations provide written codes of ethics for guidance in some business situations. * Identify and analyze the principal elements in the situation. Identify the stakeholders – Persons or groups who may be harmed or benefited. Ask the question: What are the responsibilities and obligations of the parties involved? * Identify the alternatives and weigh the impact of each alternative on various stakeholders. * Which of the following did not result from the SOX? Tax rates on corporations decreased. Business Activities All businesses are involved in three types of activity– * Financing Two primary sources of outside funds are 1. Borrowing money * Amounts owed are called liabilities. * Parties to whom amounts are owed are creditors. * Notes payable and bonds payable are different type of liabilities. 2. Issuing shares of stock for cash....
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