Question

"Accounting Valuation and Ethics" Please respond to the following: As a CFO of a publically traded company, suggest how you would create an ethical environment to ensure account balances are correctly valued and reported so that information is reliable for users. Provide support for your rationale. Assess the ethical requirements as outlined in the Sarbanes-Oxley Act, indicating whether or not you believe the requirements are adequate to ensure integrity in financial accounting and reporting activities. Suggest improvements that may be needed while providing support for your rationale.

Answer 1

Assess the ethical requirements as outlined in the Sarbanes-Oxley Act, indicating whether or not you believe the requirements are adequate to ensure integrity in financial accounting and reporting activities. Suggest improvements that may be needed while providing support for your rationale. I definitely believe that the ethical requirements outlined in the Sarbanes-Oxley Act are sufficient enough to warrant that financial accounting and reporting activities are being performed within the utmost degree of honesty. The code of ethics in the Sarbanes-Oxley Act cover numerous areas such as Corporate Responsibility in Financial Reporting, the anticipated behavior of high-ranking financial officers, whistleblowing and skirmish of interest just to name a little. It would be on the best attentiveness of all CFO's and high-ranking level management to get very acquainted with the Sarbanes-Oxley Act in order to certify that their establishments are conducting business in harmony with the rules and code of ethics set by the act. I really don't feel that anything within the Sarbanes-Oxley Act should be changed, but rather a sense of individual accountability be stressed between all CFO's and high-ranking management

Typically, codes of ethics are divided into five sections:

1. The introductory section, in which the organization introduces the code and explains why is it is being promulgated, to whom it applies, and how it is to be used. The introduction also typically contains a personal statement by the CEO of his or her commitment to the values contained in the code, and a promise to act consistently with those values.
2. A statement of core values and principles with each defined in simple business language. Principles may be "moral" principles, such as honesty, respect, and fairness; they also may be "pragmatic/business" principles, such as excellence, profitability, quality, or customer satisfaction. Similarly, some values might be characterized as "ethical" (e.g., honesty and fairness) while others are more aptly described as "organizational" (e.g., excellence and sustainable development).
3. Behavioral examples illustrating each value/principle, with a clear statement that such illustrations are not intended to be inclusive or limiting. Often these examples involve the very types of dilemmas and ambiguities that an individual might encounter in his or her job and are supplemented with references to specific company policies.
4. A discussion of the organization's supporting systems-the infrastructure that supports the code. Typically, this includes such items as where to go for interpretation, how to report suspected misconduct, where to find answers to frequently asked questions, and whether these systems may be used anonymously. An organization generally will state its commitment to confidentiality and non-retaliation for the use of any of the supporting systems.
5. A statement regarding personal responsibility, indicating that it is each individual's responsibility to know and understand the expectations and requirements set forth in the code and to meet those standards. This can, and often does, include a statement that employees must report suspected misconduct and that failure to do so is itself a code violation. It will also typically affirm the potential for disciplinary consequences up to and including dismissal for code violations.