Unethical Behavior

In: Business and Management

Submitted By donnas428
Words 417
Pages 2

Impact of Unethical Behavior Article Analysis
Donna Sutton
University of Phoenix
Financial Accounting II
ACCT 363
May 09, 2010

Impact of Unethical Behavior Article Analysis
The impact of the financial crisis created by such companies as Enron gave a reason for Congress to address some of the unethical practices of accountants. The American public no longer trusted accountants after losing retirements and life savings after making investments in companies that were reporting false financial statements. President George Bush signed the Sarbanes-Oxley Act into law in 2002 to try to avert any future dealings of an unethical nature (Dummies.com)
The Sarbanes Oxley Act states that companies must enact internal controls to counteract fraud, deceit and wrong doing by its auditors, CEO’s, financial personnel, and accountants when reporting the financial statements for their companies. CEO’s can no longer say they were unaware of deceitful financial statements. They will be held responsible for the company’s financials and also be penalized. This act will prevent companies from reporting inaccurate financial statements to the public and allow Americans to make informed investment decisions from accurate financial statements.
Confidentiality is a huge concern for clients of companies. This issue was addressed in Ruling 112. A client is now given the choice of sharing their information with other companies or keeping it confidential. Today, the client must be given advance notice that the firm may share his information. At this point, the client has opportunity to say he does not want his information shared with anyone. The company has to abide by the decision of the client or face the penalties of breaking the law (Knauf).
Ruling 12 says when companies outsource a client’s work, the…...

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