Law 421 Week 5 Article
Law 421 Week 5 ArticleWeek Five Article Review
University of Phoenix
Contemporary Business Law
April 29, 2013
University of Phoenix Material
Article Review Format Guide
UNIVERSITY OF PHOENIX
DATE: April 29, 2013
TO: Valentine Castillo
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
The article discusses whether the Sarbanes-Oxley Act and the subsequence laws were the correct solution for the problems that arose from the Enron and WorldCom bankruptcies. The article illustrates how the different rules and legislature affect different size business, and the ramifications that resulted for companies that must follow the Sarbanes-Oxley Act.
The authors of the article also conducted a study on whether or not fraud of the financial statements was in direct correlation of businesses filing bankruptcy (Nogler & Inwon, 2011, p. 68) like in the cases of Enron and WorldCom. The results found 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 issues were rampant in the article. For instance, with the issuance of the Sarbanes-Oxley Act of 2002, companies chose to “go dark” to “no longer trade publically,” (Nogler & Inwon, 2011, p. 67) in order to not have to comply fully with SOX. The article also address whether it is fair or just to make smaller companies follow the same exact rules and fines of such articles as Article 404 of the SOX Act.
Discuss how the legal issues affect business. For example, could the problems have been...