Introduction: The Sarbanes-Oxley Act of 2002 was enacted in July 30, 2002 that set new law to enhance standard for all U.S public company, nonprofit, university and government entities. Famous scandals include the corruptions of WorldCom, Adelphia, Peregrine Systems, Tyco, and Enron had cost investors and company billions of dollars. Due to lack of organization structure and fraud prevention system companies would likely to be more exposed to employees to commit fraud. Policy like Whistblowing had changed organizations. The article “Whistleblowing and Good Government” is describe how one company should implementing and researching the best method of preventing fraud within company internally and externally. This article also defines the term Whistleblowing, and how to develop the policy and suggesting the best practice that company could use as resources.
Article Summary: Over the pass decade there was numerous, both corporate and Government sector had committed some type of fraud that cause company billion dollars a year across the United States. One of the most famous case where higher managers at World Bank took over $2 millions of dollar involved in kickbacks, payoffs, bribery, embezzlement and collusive bidding. With the increasing of fraud many company and non-profit began to implement the SOX within their organization. One of the most important tools of SOX is Whistleblowing policy, the act of reporting wrongdoing to another within the organization internally or externally parties.
In 1989 The Whistleblower Protection Act was passed and amended in 1994, to protect any Federal Employees from a worked place from retaliation when they disclosed any fraud. The article discussed the reason why organization, non-profit, universities, and government entities are considering implementing whistleblowing practices due to high fraud and abuse of practice. Based on 2006 fact from the Association of Certified Fraud Examiner “Report to the Nation on Occupational Fraud and Abuse” below is the reason why company should implementing SOX to prevent or control and reduce fraud from occurring.
• More than $600 billion in annual losses due to attributed fraud
• 48% of the detection of owner/executive fraud schemes.
• 34% of detection of fraudulent activity for not-for-profit organization
• 39.7% of detection of fraudulent activity for government agencies
The article also discussed of many small businesses and nonprofit struggling with level of segregation of duties and by enforcing a better Whistleblowing policy could reduce fraudulent activities and also give internal and external department a better signal to perform a positive exercise for corporate governance. One of many practices mechanisms for universities, government entities, and nonprofit for implementation should establishing hot lines, anonymous voicemail, anonymous email, and secure suggestion drop boxes to facilitate the complaint process. With this mechanisms should be processes for communication with employee and addressing and identifying concern. Such as National Association of College and University Business Officers provide Whistleblowing guideline but doesn’t required SOX but recommended their human resources communication policies. “The BoardSource and Independent Sector “and “National Council of Nonprofit Association are both recommended their leaders take any type of information from employee seriously, should investigate the situation, justified and make corrections. They also make policy to preventing any retaliation against Whistleblowers and should address any false allegations, confidentially, and procedure when receiving reporting violation. However, management should develop and implemented Whistleblower policy and submitted to the audit committee. Also, company should plan out how to implement and develope Whistleblower policy:
1. Clear definition of individual covered by the policy described how policy should cover it university, faculty, staffs, vendors, and students should be explain and education of whistleblowing policy.
2. Nonretaliation provision policy should prevent and protect whistleblower if they report or filing reasonable claims. It should prevent from any discrimination or retaliation toward them.
3. Confidentially is the most important piece of Whistlebowing policy and it will create a better atmosphere for employee to submitting their name and information when are filing any claim and allowing investigation process become easy when are asking questions.
4. Process is a whistleblower policy that instructed employee where to take their claim. Such as taking the information to their higher manager or external parties. Or they other processing method could be including telephone, email, hotlines, website and suggestion that employee could report information to.
Conclusion:
In 1989 The Whistleblower Protection Act was passed and amended in 1994, to protect any Federal Employees from a worked place from retaliation when they disclosed any fraud. In addition,Whistleblower policies should prevent discrimination or retaliation against employee who reports the problem. Whistleblowing policies help to increase awareness within company, universities, corporates, and non-profit organization in preventing fraud internally and externally.

This paper suggests that company and organization should detect fraud by making certain procedure such as a set of clear standard from the begnning, control and audititor who is reviewing and approve sensitive documents.The Sarbanes-Oxley Act of 2002 (SOX) had shaped the way of our corporate and government businesses. Company had lost billion dollars every year due to frauds, money laundry, kickback and etc. The article is about introducing Whistleblowing policy and increasing awareness to companies, universities, corporate and nonprofit organizations. It also highlights the important of the component of the whistleblowling policies and help the company understanding more and to adapt how to apply policy. However, company and organization should detect fraud by making certain procedure such as set clear standard from the beginning, control and audit who is reviewing and approved sensitive documents and should have annual audit.

Reference:

Eaton, T. D. (2007). Whistleblowing and Good Governance. CPA Journal, 77(6), 66.