In: Operations Management
Explain the goals of Sarbanes-Oxley Act (SOX) legislation? original answer please
Sarbanes-Oxley Act came into existence owing to the public outcry that emerged due to the financial misconduct of the Public companies as faced by the shareholders and public. Accordingly, this Act became part of the US Federal law that emphasizes upon the Corporate responsibility, transparency in business and the Auditing accountability of the Public companies, as an expansion of the already existing accounting acts that govern the activities undertaken by the Public companies.
Putting into force this act does not mean that it can completely help to solve the ethical dilemma among Public Corporations in the US. Rather it shall complement the current existence of the ethical codes in a major way. As a matter of fact, when abiding by this act, most of the part of code of ethics are formally covered in it but for the further enhancing of a Corporate image and for the implementing the strategies of Corporate Social Responsibility, Sarbanes-Oxley Act may not serve the complete purpose as these are the voluntary activities as undertaken by the Companies to which Sarbanes-Oxley Act shall have only a limited role to play. Therefore, even though it may not replace the ethical dilemma totally, its major goals is to let the Company run its business in more ethical and socially responsible way that is need to be adapted by the Public companies in order to have a long-term survival in the industry.