law421 final article review
Was the "one-size-fits-all" justified
Constance Punch
Law/421
November 5, 2014
Kenneth Johnston
Was the "one-size-fits-all" justified
DATE: November 16, 2014
TO: Kenneth Johnston
FROM: Constance Punch
RE: Sarbanes-Oxley Act: Was the ‘one-size-fits-all’ approach justified?
Nogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act: Was the ’one-size-fits-all’ approach justified? Journal of Corporate Accounting & Finance (Wiley), 22(4), 65-76. http://dx.doi.org/10.1002/jcaf.20691
ARTICLE SYNOPSIS
When looking at the Sarbanes-Oxley Act and subsequence laws, the article looks at whether or not they were the correct solution regarding problems that was a direct result from the Enron and WorldCom bankruptcies. We can determine by the illustration how the size of the business is affected by the different rules and legislature. The articles also shows the ramifications that resulted for these companies forced to comply with the Sarbanes-Oxley Act.
In cases such as Enron and WorldCom, the authors wanted to see if businesses filing bankruptcy were in direct correlation of fraud of business financial statements by conducting a study. Nogler & Inwon, 2011, p. 68). The results brought to light the fact that the larger the company that filed bankruptcy the more likely that securities fraud litigation and general overstatement of the revenue and assets of the company occurred. (Nogler & Inwon, 2011).
LEGAL ISSUE
There were many legal issues within this article. An example would be the insurance of the Sarbanes-Oxley Act of 2002. Many companies decided to “go dark” to “no longer trade publically,” (Nogler & Inwon, 2011, p. 67) so they weren’t forced to comply fully with Sarbanes-Oxley Act (SOX). It also argued by forcing a smaller company to follow the same rules and fines such as Article 404 of the Sox Act wasn’t just or fair.
MANAGERIAL PERSPECTIVE
Financial stability of any corporation as well as our country is threatened by fraud. This article shows
Constance Punch
Law/421
November 5, 2014
Kenneth Johnston
Was the "one-size-fits-all" justified
DATE: November 16, 2014
TO: Kenneth Johnston
FROM: Constance Punch
RE: Sarbanes-Oxley Act: Was the ‘one-size-fits-all’ approach justified?
Nogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act: Was the ’one-size-fits-all’ approach justified? Journal of Corporate Accounting & Finance (Wiley), 22(4), 65-76. http://dx.doi.org/10.1002/jcaf.20691
ARTICLE SYNOPSIS
When looking at the Sarbanes-Oxley Act and subsequence laws, the article looks at whether or not they were the correct solution regarding problems that was a direct result from the Enron and WorldCom bankruptcies. We can determine by the illustration how the size of the business is affected by the different rules and legislature. The articles also shows the ramifications that resulted for these companies forced to comply with the Sarbanes-Oxley Act.
In cases such as Enron and WorldCom, the authors wanted to see if businesses filing bankruptcy were in direct correlation of fraud of business financial statements by conducting a study. Nogler & Inwon, 2011, p. 68). The results brought to light the fact that the larger the company that filed bankruptcy the more likely that securities fraud litigation and general overstatement of the revenue and assets of the company occurred. (Nogler & Inwon, 2011).
LEGAL ISSUE
There were many legal issues within this article. An example would be the insurance of the Sarbanes-Oxley Act of 2002. Many companies decided to “go dark” to “no longer trade publically,” (Nogler & Inwon, 2011, p. 67) so they weren’t forced to comply fully with Sarbanes-Oxley Act (SOX). It also argued by forcing a smaller company to follow the same rules and fines such as Article 404 of the Sox Act wasn’t just or fair.
MANAGERIAL PERSPECTIVE
Financial stability of any corporation as well as our country is threatened by fraud. This article shows
References: Nogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act: Was the ’one-size-fits-all’ approach justified? Journal of Corporate Accounting & Finance (Wiley), 22(4), 65-76. http://dx.doi.org/10.1002/jcaf.20691