Effect of Unethical Behavior Article Analysis
February 25, 2013
ACC/291

After the unethical acts of two famous companies Enron and World Com congress passed the Sarbanes-Oxly Act in 2002. This legislation was put in place due to the companies cooking the books and making the company look better financially then they really were. This defrauded a lot of public investors and thus the act came in to being to protect the public from scandals like this. To do this it called out for stronger internal controls, outside auditors, and protection for people who witness and had information that an employee is practicing unethically and allowed for the employee to become a whistle blower. This law also made the CEO and CFO of a publicly traded company responsible for the accuracy of the financials or stiff fines or imprisonment was possible. The government forced ethics of finances and record keeping which was indeed needed to steer companies back in the right direction and protect investors as well. As the years have passed on since the act was put in place there are companies that actually teach ethics to employees. Human Resources are conducting test that will show a persons moral or ethical stands on things before they hire the individual. Employee handbooks have clear guidelines on what is acceptable ethical behavior and those that are not and punishment for infractions. The Sarbanes-Oxly act does cost a company more to keep themselves in check with the law. Some question how effective it really is today as technology grows and newer ways are being found out to cheat the system without being caught. Controversy also over the changing of times, ethics, and culture over the years since the act was put into law, is it able to change? Most would say that companies that were ethical to begin with, SOX was not a big deal to them