The Sarbanes-Oxley had more of a negative effect on small business
by implementing more operating requirements and increasing
business costs. This hurt new, expanding, and small businesses. To
meet SOX guidelines small businesses usually need to hire more
accounting personnel, which can be very costly. The requirements
that SOX requires companies to implement a strong segregation of
accounting duties. With having this separation of duties one
employee is not responsible for too many accounting functions. The
SOX was put into place to ensure ethical financial reporting. SOX
section 404 requires both internal and external audits. Both of these
audits serve their own purpose.
As stated in the article, ” The executives polled by Deloitte believe
that despite regulations, employees are continuing to struggle with
ethics compliance due to inconsistency of clear, concise and frequent
ethics program communications and training for all employees (28.5
percent); lack of incentives and repercussions around ethical and
unethical behavior (16.3 percent); varied ethical postures of third
parties with whom employees regularly interact (14.8 percent) and
differing ethical standards for various employee groups (12.5
percent).” (Cohn, 2017) If employees are still struggling 15 years later,
I can only imagine how SOX could impact my future in accounting.
Making financial statements dependable by ensuring the information
is accurate allows for owners, lenders, or investors to make the best
decisions for the company. The accuracy of the financial statements
is crucial when investors who may want to buy or sell their stocks.
Remaining consistent, transparent, and accurate are all critical for
keeping financial statements dependable.
Whether SOX or other ethical regulations, you should provide high-
quality accounting information for companies, as an accountant,
integrity is a basic commitment of accountants to the society and the
foundation of accounting personnel. Accounting professional moral is
the moral criterion that an accountant should follow during
accounting work.
The reliability of financials is important. First, once the financial
information loses its reliability, it will have a serious negative impact
on enterprises and relevant personnel. Second, to ensure the
authenticity and effectiveness of financial accounting work, it is
necessary to ensure the reliability of financial accounting information.
How to ensure that financials are reliable? In my opinion, first, we
should improve the corporate governance structure. Second, we
should improve the company’s internal accounting control system.
Third, we should improve the accounting information disclosure
system. Lastly, we should improve the legal environment for
accounting and so on.
Reference
Cohn, M. (2017). As Sarbanes-Oxley nears 15-year anniversary,
ethics fall short. Retrieved from: As Sarbanes-Oxley nears 15-year
anniversary, ethics fall short | Accounting Today
