The Sarbanes-Oxley Act was put into place to ensure ethical financial
reporting. While it has helped with this, there are still some
shortcomings. For large corporation’s ethics seem to be the struggle.
The problem is that even with proper ethics training there tends to be
a lack of consequences for unethical behavior. There also can be
inconsistencies in the caliber of training in different departments in a
large corporation. The problem smaller companies have with SOX is
that it can be costly. SOX section 404 requires both internal and
external audits. Hiring an internal audit team plus contracting an
outside audit team can prove too costly for the small business. This
could cause them to not go public or go offshore. So far as how SOX
impacts my personal goals, currently I already deal with internal
control audits on my reporting. I reconcile payments to our outside
collection agencies which get audited both internally and externally.
As for my long-term goals, I could see myself as part of an outside
auditor. Accurate financial documents are important to insure ethical
reporting. This is important to investors and stockholders so that they
know the health of the company that they are dealing with. The steps
to ensure accurate financial reporting are the internal and external
audits and just checks and balances while creating the reports. When
creating my reports, I always include checks and balances. Some of
my co-workers are not as meticulous as me and mistakes are made. I
think even with the drawbacks SOX is a good thing. What do you
think? Regular auditing is important for a publicly traded company
because the investors need to feel confident that the financial
statements are accurate. While I understand that SOX compliance
can be too costly for smaller businesses, I feel that's just the cost of
doing business. If you want to have the ability to raise capital as a
publicly traded company, then one should expect to bear the costs
associated with SOX compliance.
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
