Sarbanes-Oxley Act.2002
Darrell Kelley
LAW/412
June 27,2013
Mark Reed
Sarbanes-Oxley Act.2002
In this essay one will be discussing Enron, the illegal activity of Enron and the establishment of the Sarbanes-Oxley act 2002. Also one Discusses the ethical views in todays business world and the criminal penalties that the Sarbanes-Oxley Act provides
Enron was an American energy business in commodities and services company based out of Houston, Texas. Enron was a rapid growing corporation that organization goal was in producing natural gases, communications, electricity, pulp and paper with was once believed to have had employed approximately over 18,000 employees (Frontain). With monopolizing in such resource ventures Enron was once believed to have made well over 100 hundred billion dollars in revenue. In the height of Enron’s success of banking in million of dollars through out their empire there were also faulty accounting be done internally. Thousand to millions of dollars being signed off to hire up E of the company leading to questioning of the money (Frontain), account scandals and audits. By the early 2000’s Enron was in over their head in fraudulent financial documents, having less than enough funds to payback what was owed, as well keeping employees on payroll Enron made the move of filing bankruptcy leaving whatever ethical, moral responsibility they have had abandoned.
With Enron’s fraudulent financial secrets and bankruptcy being brought to surface, which had left well over 20,000 people unemployed without pensions there was only one avenue to take. In 2002 Senator Paul Sarbanes and representative Michael Oxley drafted the Sarbanes-Oxley act better known as “SOX”. This act was designed to protect investors and stockholders in the business firms offering better disclosure, accurate earning reports, reflecting laws and regulations (peavler).
One fells in todays business world Sarbanes-Oxley act, offers the everyday employee so mush more security not only with their employment but with a pension that is invested in the companies retirement package. It offers the shareholders the information deserved when owning a share of a company, unlike the shareholders at Enron who where mislead and left in the dark by insufficient information. It represents moral belief in everyway by holding the CEO’s and CFO’s directly responsible for corporation failure of ethical practice (peavler), that can result in million dollar fines and imprisonment. One believes that one man should not be a million dollar mogul by ignorance of the mislead and misguided, not every one can be a million dollar CEO or CFO however everyone can and should be able to define how rich they are through the security of their finances.
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Works Cited
Frontain, M. (n.d.). Retrieved june 27, 2013, from http://www.tshaonline.org: http://www.tshaonline.org/handbook/online/articles/doe08 peavler, r. (n.d.). The Sarbenes-Oxley Act. Fruad. Retrieved from about.com: http://bizfinance.about.com/od/smallbusinessfinancefaqs/a/sarbanes-oxley-act-and-enron-scandal.htm 