Essay on "Accounting Industry"

Essay 2 pages (622 words) Sources: 2

[EXCERPT] . . . .

As they are fully aware of the different provisions of law and are willing to engage in deception to hide this fact. This is illustrating how Sarbanes-Oxley could encourage unscrupulous executives to become involved in other activities (in order to go around these regulations). When this happens, the law will become ineffective with more people using this approach on a regular basis. ("Sarbanes-Oxley Act 2002," 2006) (Frankel, 2012)

This is highlighting how these kinds of practices will lead to immoral behavior inside a number of corporations. Once this takes place, is when there is the possibility that these provisions will become obsolete by failing to keep up with these changes. This is the point that the underlying amounts of transparency will decrease (while the conflicts of interest will rise). ("Sarbanes-Oxley Act 2002," 2006)

As a result, the main question about the impact of this law is:

How will executives use other tools to circumvent different provisions?

Once this question is answered, is when the weaknesses of these regulations and their long-term effects can be seen. In this aspect, the law is providing useful enforcement provisions. However, there is the possibility that immoral executives could find other avenues to receive similar benefits by circumventing these areas. ("Sarbanes-Oxley Act 2002," 2006)

Clearly, the Sarbanes-Oxley Act is providing a foundation of addressing a host of accounting related issues. The main problem is preventing executives from using a variety of strategies to circumvent these provisions. When this takes place, the law can become ineffective by allowing immoral behavior to continue. Therefore, regulators and lawmakers must be prepared to update these guidelines. This is how they will ensure increased transparency and openness during the process.

References

Sarbanes-Oxley Act 2002. (2006). SOX Law. Retrieved from: http://www.soxlaw.com/

Frankel, A. (2012).…

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