Impact of Unethical Behavior
Impact of Unethical Behavior Article Analysis Over the past decade, numerous accounting scandals have been revealed. The impact of the unethical behavior exhibited in these scandals caused the companies that were affected to have a huge financial loss for the company as well as investors, collapse, or become in a financial crisis (Ashe and Nealy, 2010). The Sarbanes-Oxley Act of 2002 was passed “in an attempt to codify the ethical behavior of companies, their executives, and their management” (Hazel, 2010). One regulation set in place by the Sarbanes-Oxley Act, also known as SOX, was that corporate would be responsible for the information contained in the financial statements. The financial statements need to be approved by the officer or officers of a company before the report is to be filed. By signing off on the financial reports, the officers agree “that based on that officer’s knowledge, the statements contain no fraudulent or misleading information, that the financial statements and other financial information fairly present all material aspects of the financial conditions and results of operation and that the signing officers have disclosed any fraud, material or not, to auditors and the audit committee” (Hazel, 2010). In 2002, Adelphia Communications Company had to file bankruptcy because of internal corruption. Before the bankruptcy, the company was “the fifth largest cable company in the United States…” (Ashe and Nealy, 2010). Even though the CEO of Adelphia Communications Corporation signed off on the financial statements, he was the one to commit fraud that caused the downfall of his own corporation. According to NBC News, on June 20, 2005, John Rigas, the founder of Adelphia Communications Corporation, received 15 years in prison, which is one of the harshest terms to receive since the Enron scandal in 2001.
Conclusion
These scandals can easily be avoided using dual control. If two coworkers or officers check the accounting
Conclusion
These scandals can easily be avoided using dual control. If two coworkers or officers check the accounting
References: Ashe, C., & Nealy, C. (2010, November). Ethical Standards and Accounting Practices: Still an Area for Concern. Journal of International Business Disciplines, 5(1), 1-12. Hazels, B. (2010). Eight years after the fact is SOX working? A look at the Brooke corporation. Journal of Business Case Studies., 6(6), 19. NBCNEWS.COM. (2005). Retrieved from http://www.msnbc.msn.com/id/8291040 /ns/business-corporate_scandals/t/adelphia-founder-gets--year-term-son-gets/.