Please answer the four questions listed below. The answers do not require much. A paragrahph or less is fine as long as it gets to the root of the question. Please use in-text citation. 1. Discuss the impact of the Sarbanes-Oxley Act on financial reporting and disclosure and assess whether or not you believe it helps provide accurate information to users of financial statements. 2. Suggest an alternative to regulation for providing accurate financial information to stakeholders. 3. Create a scenario of accounting behavior that may be legal but not ethical. Explain your rationale. 4. Evaluate whether or not accounting professionals have an expected higher ethical standard than other professions.

Many studies have been conducted since the passing of the Sarbanes-Oxley Actconcerning the impact of this Act. Some have shown the Act in a negative light due to the high costs of compliance (Jain, & Rezaee, 2006). In a study conducted by Jain and Rezaee, the costs of meeting the standards imposed by SOX can range from $1 million to over $10 million (2006). However, the same study stated that the overall effect of the Act was an increase in the wealth of those companies that took the time and effort to comply with the requirements (Jain, & Rezaee) .Conversely, other studies have shown the Sarbanes-Oxley Act as a picture of success when considering the advantages of compliance (Verleun, Georgakopoulos, Sotiropoulos, & Vasileiou, 2011). During the course of the study conducted by Verleun, et al., they realized that the disadvantages of the Act must be considered in equal portion to the advantages (2011). Unless this tactic was taken, valuable information would be considered immaterial and lost to consideration. The conclusion of the study stated that SOX has had an overall positive effect on the quality of accounting (Verleun, et al.). Despite many critics who believe that such positivity cannot be sustained, the study states that this increase in quality is sustainable, based on a five year sample period (Verleun, et al.). In answer to the critique that the requirements of SOX are too expensive, some studies have shown that while the initial costs to comply can seem daunting, an average of time to cost balances it out (Verleun, et al.).This average is calculated by dividing the amount of costs incurred by a particular firm in order to meet the compliance requirements set by SOX by the total amount of years that company is believed to survive (Verleun, et al.). While this theory is evidenced by only one study in this paper, there are multiple others that could be considered.One such study deals with the impact of SOX on off-balance sheet supply chain activities .The result of this particular study showed that the higher the level of compliance with SOX, the greater positivity of the effect on the supply chain activities
User_3592 | Aug 31, 2013, 07:44 AM

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