Law 421 Week 5 Article

Law 421 Week 5 Article

Week Five Article Review
University of Phoenix
Contemporary Business Law
LAW/421
Valentine Castillo
April 29, 2013

University of Phoenix Material

Article Review Format Guide

MEMORANDUM
UNIVERSITY OF PHOENIX

DATE:   April 29, 2013

TO:         Valentine Castillo

FROM:  

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

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 ISSUE

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.

MANAGERIAL PERSPECTIVE

Discuss how the legal issues affect business. For example, could the problems have been...

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