Ethical Article Analysis Sox

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Ethical Article Analysis PAGE 1
Ethical Article AnalysisUniversity of PhoenixEthical Article AnalysisEthics has become the central focus of corporate governance and accounting oversight reform in recent years. The culmination of this ethical revival is the passing of the Sarbanes-Oxley Act of 2002 (SOX). The article by Miller and Bahnson titled "You say that you don't like SOX? You're not suppose to!" discusses the unethical behavior of corporate executives and accounting professionals that influenced the creation of SOX. The purpose of this paper is to discuss the impact ethics has on financial decision making and the ethical considerations involved by analyzing the points presented in the article.Ethics has a profound impact on financial decision making. The ethical choices that corporate governance makes have a direct affect on the financial future of the company and investor confidence. The article discusses the unethical choices made by management in regard to expensing stock options and the use of off-balance sheet tactics. The authors explain that by not following the recommendations of the Financial Accounting Standards Board (FASB), corporate accountants were undermining the spirit and purpose of the financial statements; to represent truthfully the financial position of the company to the public. With the public's trust and confidence in corporate financial reporting eroded, companies will have a difficult time convincing investors to place their money into the corporation's stocks. Ethics, or a lack of such, can have an enormous impact on the decisions of investors.Lack of completely separate and independent auditors was another ethical consideration discussed in the article. Miller and Bahnson (2005) argue that the supposedly independent auditing firms became more concerned with pleasing the corporate executives and...

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