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Legality and Ethicality of Corporate Governance

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Legality and Ethicality of Corporate Governance
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ETH 376
January 30, 2012
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Legality and Ethicality of Corporate Governance
United Thermostatic Controls is a publically traded corporation, and currently they are in the middle of an internal audit. The company manufactures and markets residential and commercial thermostats. The company is divided into four regions, U.S.A Sales Division, Western Sales Division, Eastern Sales Division, and Southern Sales Division. Each of these divisions has its own goals, and so far all of them have met them, except the Southern Sales Division, from which Frank Campbell is the director. Due to fluctuation in the market, parts are no longer in a high demand, and as the year end approaches, projections and goals are most likely not to be met. This paper will analysts the decision takes by Frank Campbell and the ethicality of his actions and the results of the internal audit.
Legal Issues and Applicable Laws There are several laws that United Thermostatic Controls need to abbey in order to function. Sarbanes-Oxley (SOX) act of 2002, the Generally Accepted Accounting Principles (GAAP), and the AICPA Code of Conduct, and in this case, the regulations that auditors need to comply with while performing an audit, for example the Statement on Auditing Standards, and their responsibilities to the company they work for.
Sarbanes-Oxley and United Thermostatic Controls There are several provisions in particular, from the Sarbanes-Oxley (SOX) act of 2002 that need to be taken into more consideration. Section 302 Corporate Responsibility for Financial Reports refers to the responsibility that CEO and CFO have when signing financial reports, this need to be accurate and truthful in the information that they have. In this case there is no evidence that the reports have already be sent to SEC or that have being

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