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Sarbanes Oxley Act Term Paper

Sarbanes-Oxley Act -- it's a good thing In the wake of the horrible corporate scandals of recent years, including Enron and Arthur Anderson, it became readily apparent that some kind of regulation of ethics must be established. Indeed, any scandal in which large numbers of investors lose billions of dollars due to misconduct, is likely to bring action, and the Sarbanes-Oxley

Act of 2002 is just that. However, although much is said about the useful effects of the act on the economy in general (after all, the confidence of investors is one of the strongest key's to a robust economy), the impact on individual employee "whistleblowers" within corporations is perhaps the most striking with regard to the expression of personal business ethics and responsibilities, as well as the effectiveness of the Act itself.

Most people consider the Sarbanes-Oxley Act, or "SOA" to be an excellent example of the much needed strict rules and reporting guidelines designed to keep questionable corporate practices...

Indeed, recent events, Martha Stewart included, have illustrated the complete abdication of ethical standards among many corporate "big wigs." To be sure, such measures are designed to keep senior management on the straight and narrow. However, the impact of the Act on potential "whistleblowers" is perhaps one of the most significant parts of the law.
Previous to the SOA, so called "whistleblowers" or individuals within a corporation who either for ethical, or personal reasons, took it upon themselves to inform on the illegal or unethical practices of their employers, were in a precarious position. Not only could they face demotion, harassment or outright termination as a result of their disclosures, but they could also be "blacklisted" from further employment elsewhere. However, the SOA put an end to that on July 30, 2002, the day President Bush signed the Act into law.

Thankfully, section 806 of the Act provides significant protection to employees of companies (publicly traded)…

Sources used in this document:
In short, the Sarbanes-Oxley act is a powerful, and much needed addition to the laws governing publicly traded companies. However, the most significant aspect of the Act is its provisions for whistleblowers. After all, when the Martha's of the world have employees looking over their shoulders, they might think twice before acting unethically. Sure, imposed ethics are poor shadows of authentic integrity -- but an investor will take what he or she can get, as long as it prevents the loss of all they have invested in good faith.

Gamble, John. Sarbanes-Oxley. Retrieved from Web site on 03 March, 2004<http://www.laborlawyers.com/FSL5CS/interview%20with%20the%20expert/interview%20with%20the%20expert75.asp

Ibid.
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