The Sarbanes-Oxley Act

The Sarbanes-Oxley Act was enacted in July 2002 to restore consumer trust in the markets and to close loopholes that enabled public companies to mislead investors. After a long period of commercial dishonors involving major public corporations, the Sarbanes-Oxley Act was approved. Its aim aimed to restore public confidence in the private sector in the United States. The Sarbanes-Oxley Act requires public corporations to strengthen audit panels, conduct internal panel tests, maintain individual oversight of executives and officers for the accuracy of financial reporting, and promote disclosure (Mohamed, 78). The Sarbanes-Oxley Act also established stricter felonious fines for safeties scam and modify how public accounting firms function their business.

How private and Non-profit organization is influenced by the Sarbanes-Oxley Act accounting and corporate governance rules?

The act played as a wake- up call to the non-profit and private organization. The private and non-profit organization have established one or more financial committee that is audit, finance, and investors (Culp, 102). While in large or medium private and non- profit organization that engage in yearly reviews, the panel has a detached audit committee or subcommittee. This is to ensure the independence of audit committees. The board members serves as volunteers and staff members are not allowed to vote. The state provides liability to the volunteer directors.

How does Sarbanes-Oxley Act encourage more ethical behavior from corporate officers and directors?

Sarbanes-Oxley Act encourages more ethical behavior from corporate officers and directors by ensuring the independence of the board of directors and audit committees achieved through reducing conflicts of interest among board management and members (Mohamed, 80). The Act strengthens internal control system that promotes transparent financial keeping, discourage fraud and falsification of account records.

What is the repercussion of failure to comply?

The repercussion of a corporate official who don’t comply or submission to the inaccurate certificate to the Sarbanes Oxley Act is subjected to up to $ one million or ten years of imprisonment. However, if the wrong certificate was submitted purposely the corporate is subjected to $ five million and twenty years of imprisonment (Mohamed, 75).

What other business function do you believe will be next to implement a set of standard such as Sarbanes-Oxley Act has established for accounting?

I believe Human resource management department will be the next to implement a set of standard because of various challenges faced by the human resource management department.

Leadership development is the first challenge. Currently, workforce is aging quickly leading to losing leaders in the department and also poor leadership resulting to early retirement (Johnson, 110).

Recruitment and selection is the other challenges which occur when there are labor shortages or the performance of the current employee performance does not meet expectation which is a big threat to the department.

Retention is the other challenge. The employee retention is a challenge to the human resource department since the best employee is hard to retain. The best workers will use an organization as a stepping stone to a new career path, hence with no suitable strategy, the human resource department may face the challenge.

Motivation is the last challenge whereby shallow spirits and deprived commitment altitudes are evidence of job displeasure which is among the human resource management challenge. Most workers have not been motivated in their work place this lead to low productivity.

Works Cited

Culp, Christopher L., and William A. Niskanen, eds. Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations. John Wiley & Sons, (2003), 90-110.

Johnson, M. Eric, and Eric Goetz. “Embedding information security into the organization.” IEEE Security & Privacy 5.3 (2007), 101-115.

Mohamed, Norazida. “Financial Statements Fraud Control: Exploring Internal Control Strategies in Two Malaysian Public Interest Entities’.” (2014), 70-90