The Sarbanes-Oxley Act 1 was one year old on July 30, 2002. Promulgated by Congress as statute and signed into law by President Bush after the corporate scandals of 2002, “this law says to every American: there will not be a different ethical standard for corporate America than the standard that applies to everyone else. The honesty you expect in your small businesses, or in your workplaces, in your community or in your home, will be expected and enforced in every corporate suite in this country” (Web 1).
Its aim is deterrence to adopt tough new provisions to deter and punish corporate and accounting fraud and corruption. Sarbanes Oxley is the most sweeping attempt to regulate and make ethical public markets since the Securities and Exchange Act of 1934. The Sarbanes-Oxley Act has two broad categories: accounting oversight, and corporate governance. Within these domains is regulatory guidance on CEO/CFO accountability, audit committees, external auditor independence, corporate governance and increased financial disclosure transparency. In setting these standards, this Act adopts a new standard for corporate financial reporting accuracy. Titles VIII, IX, and XI, which cover white-collar crimes are the criminal enforcement tools that attach liability to senior leadership for violating reporting requirements.
While this is a necessary condition for corporate responsibility, it is insufficient. Public policy, merely addresses the manifestations of corporate social pathology. The cause itself lies in the stickier region of institutional visions, values and beliefs, as modeled by the top executives in corporations. Addressing these issues will be a longer-term effort to change cultures, shared meanings about profit and loss, and social responsibility that must be spearheaded by the highest levels of corporate governance..........
