DATE: November 25, 2013
TO: XXX
FROM: XXX
RE: Impact of Sarbanes-Oxley Act upon management: a behavioral discussion. (Linsley, C., & Linsley, C., 2008)
ARTICLE SYNOPSIS
The authors of this article had a desire to examine the behavioral psychological affects on senior management staff members after the introduction of the Sarbanes-Oxley Act of 2002. The behavior changes could affect future legislation that regulates the financial community and how it is perceived and applied. Linsey, C. and Linsey, C. (2008), suggest that it would be useful to further understand how legislation affects people in order to predict behavior changes affected by future legislation and regulation. Linsey, C. and Linsey C. (2008), conducted a very thorough investigation into the SOA effects on senior management, using the work of psychologists Tversky and Kahneman, (Linsey, C. and Linsey, C., 2008) to arrive at their conclusion that behavior of senior management was indeed affection by the Sarbanes-Oxley Act. They saw that the Act could have could be seen in a negative light by management due to assumption and bias in their established thinking. One thing that I particularly interesting about the article, is that the authors noted what they considered to be the managerial reaction to the SOA. They believed that the new regulations would magnify managements discernment about full disclosure and ethical practices by making them more aware of the possible outcomes should they be less than honest or fail to maintain compliance. I should note that it is not only important for managers to be compliant to guard their own reputation, but also that of the company and that of their subordinates. If a manager was investigated for violating the Sarbanes-Oxley Act
