Ethics and law in business and society Research Paper

Ethics and law in business and society - Research Paper Example Ethics represents the doctrine related to moral philosophy, which incorporates systematic, defending and recommending concepts that further intend to segregate between the right deeds and wrong deeds. The anthropomorphic view reflects about the human behavior of following an order under the enforcement of lawThis view is generally adapted by individuals and entities as a phenomenon of natural pride for being able to provide a meaning to their world. Ironically, the underlying fact is that human beings pertain to be the actual source of morals and ethics. Therein, imposition of laws to raise the ethical standard of human beings is often contravened with skeptic arguments concerning its effectiveness. One such example had been the enactment of Hippocratic Oath, which has continued in the recent phenomenon, with the enactment of the Sarbanes-Oxley Act 2002. The Sarbanes-Oxley Act 2002 has been enacted to protect the investors, who invest in the form of securities by refining the accurat eness and trustworthiness of the company’s financial disclosure. This law was basically enacted in retort to the frequent reporting of accounting scandals in early 2000s, especially drawing from the inferences in the Enron case. Correspondingly, this particular law complies with a motive similar to that endured in the Hippocratic Oath to raise integrity and moral values amid the medical professionals and the physicians for practicing medicine with truthfulness, but in the paradigm of accountants and auditors in the 21st century context (Newsome & Wilson, 2006; Tyson, 2001). Although these two laws deal with different realms of professionalism, while the effectiveness and complete realization of the intended virtues of Hippocratic Oath in raising the moral values of medical practitioners remain dubious (Stern & Papadakis, 2006; Gilman, 2005), the effectiveness of Sarbanes-Oxley Act is implying the same for accountants and auditors has also been a subject of major concern. Henc e, the focal point of the discussion henceforth is not to differentiate between these two laws but is rather confined to critically examine the roots and the effectiveness possibilities of Sarbanes-Oxley Act 2002 as a measure to stimulate moral understanding and develop conscience within accountants and auditors to avoid instances such as Enron’s collapse in the future. This essay, in precise, thus intends to discuss about the public policies associated with the Sarbanes-Oxley Act 2002 from a critical viewpoint. History of the Act Public Policy Prescription Section 302 of the Sarbanes-Oxley Act 2002 reflects about the financial reports that need to incorporate certain certifications to prove its accuracy, transparency and legitimacy. The policy further stresses on the fact that it is the responsibility of the financial officers to review the report before signing their agreement to the disclosed facts, in order to ensure that the report being framed does not entail ‘Mat erial Untrue Statement’. Eventually, the signing officers are considered as solely responsible for the internal controls of a company and thus, the only enforcer to accounting integrity. Correspondingly, Sarbanes-Oxley Act 2002’s section 401 incorporates the policies associated with the financial disclosures. In accordance to this particular section, the financial statements being published must be accurate. Furthermore, these financial statements must incorporate ‘Material Off-Balance Sheet’ transactions or liabilities. The commission here is basically required to conduct a detailed study on the ‘Off-Balance Transaction’. According to the policies of Sarbanes-Oxley Act 2002 mentioned under section 404, the issuers must publish information concerning the scope along with the adequacy in the annual reports. Eventually, the section 409 of the concerned act focuses on the responsibilities of the issuers to inform the public on immediate basis per taining to any change(s), which occurs within their financial