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SOX The Sarbanes-Oxley Act SOX  Essay

One critical area is with respect to board oversight. The Act mandated that the boards contain enough external members in order to function with relative independence from management. Board members must be sufficiently competent to detect fraud. This means that some board members should have functional competence in the areas in which the company operates while other board members should have significant financial expertise to detect suspicious transactions. Improving governance at the director level is critical to improving governance overall (Guerra, 2004) Another area where improvement is needed is with respect to auditors and analysts. Public accounting firms had taken the attitude that auditing was an ancillary function to their consulting businesses, creating a conflict of interest. This conflict is to be eliminated, where firms are not to engage in consulting business with the companies that they audit. Analysts must have firewalls between them and the...

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It is not sufficient to simply write codes about governance, it is necessary to have a culture that supports ethical, responsible behavior. This means removing incentives for unethical behavior and emphasizing ethical, responsible behavior in corporate communications. Companies need to ensure that the precursors for such behavior are eliminated, and not leave it to the auditors, directors and executives to uncover impropriety.
Works Cited:

SOX Law website, various pages. (2003). Retrieved April 16, 2010 from http://www.soxlaw.com/s401.htm

Guerra, J. (2004). The Sarbanes-Oxley Act and the evolution of corporate governance. CPA Journal. Retrieved April 16, 2010 from http://www.nysscpa.org/cpajournal/2004/304/perspectives/nv5.htm

Sources used in this document:
Works Cited:

SOX Law website, various pages. (2003). Retrieved April 16, 2010 from http://www.soxlaw.com/s401.htm

Guerra, J. (2004). The Sarbanes-Oxley Act and the evolution of corporate governance. CPA Journal. Retrieved April 16, 2010 from http://www.nysscpa.org/cpajournal/2004/304/perspectives/nv5.htm
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