Effect of Unethical Behavior Article Analysis for Accounting BY ni27anb Effect on Unethical Behavior Article Analysis The Sarbanes-Oxley Act of 2002 was intended to improve corporate governance and increase the transparency of financial audits. The legislation also could have significant effects on the public accounting industry. Sarbanes-Oxley Act (SOX) of 2002 has requires companies to repeat the section 404-certification process annually and to review processes and controls for changes on a quarterly basis.
The Act also promises to make important improvements in the way that companies perceive their responsibility in terms of ethics, corporate governance and responsibility to shareholders. Sarbanes-Oxley Act (SOX) of 2002 prohibits Non-Audit Services Concurrently with Audit Services, that is, a registered public accounting firm from providing any non-audit service to a company while concurrently offering audit services.
This bill attempts to restore investors ‘confidence in the accountants’ bjectivity of clients’ books. While loopholes still remain, Sarbanes-Oxley Act appears to alleviate some of investor’s concerns about the objectivity of CPAs (Cosgrove, 2006). Sarbanes-Oxley Act requires public accounting firms to register with the newly established Public Company Accounting Oversight Board (PCAOB). More important, it also significantly narrows the scope of non- audit services that can be provided to an audit client.
The acts requires organizations to implement methods for the continual onitoring of the key internal controls and many companies have decided to delegate the responsibility for the review and updating of process documentation, and the testing of internal controls to process owners. The Sarbanes-Oxley Act of 2002, requires public companies to certify the adequacy of their internal controls for financial reporting purposes.
Because of the Sarbanes -Oxley Act of 2002 companies are required to fully comply with their certification and reporting obligations and esponsibilities by assuring that any financial transactions are correctly authorized and recorded, and also assure that assets are properly safeguarded. Auditors are required to certify the underlying controls and processes that organizations and companies utilize to reach their financial results. Because of the Oxley Act it has made payroll mangers even more knowledgeable about the education and training process for internal and external periodic audits of the Payroll Systems.