The Sarbanes-Oxley Act of 2002 - Assignment Example

1. Supporters contend the Sabanes-Oxley Act of 2002 was necessary and has played a useful role in restoring public confidence in the nation’s capital markets by, among other things, strengthening corporate accounting controls. Opponents claim it has reduced America’s international competitive edge against foreign financial service providers, saying SOX has introduced an overly complex regulatory environment into U.S. financial markets (Gale, n.p.). It does not seem fair that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. Although the act adds responsibility for the chief executives it benefit’s the public shareholders and protects them from unethical business transactions. The executives are placed in a position where they can easily fall prey to accidental false records or records that are misreported by someone else. Executives could find it difficult to track company spending on lower levels and ensure that all transactions are being reported. Without security, investors will not place trust in a company they do not have accurate reports on. This also gives investors the sense that rather than having their money controlled by one person, they have a say in their money and they have a right to see where the money goes and where it grows. This security encourages investors to place this money in these companies once again. 2. If someone was reading my CAT scan from halfway around the world I would have mixed feelings. I would be impressed and feel pride in the fact that we have advanced our technology enough to have the ability to accomplish something like this. I also think it would be a great way to access other opinions. If the doctors in my area are unfamiliar with certain conditions, having access to other information sources or doctors with various experience can be very positive. I might be diagnosed or healed faster if the doctor is familiar with the type of symptoms I have. It also gives the chance for medicine to grow faster as a whole with the exchange of ideas and experiences. On the other hand, if someone over there is reading my CAT scan, then someone over here is not. As long as there are qualified physicians near me who have the same level of expertise, the job should be left to them. If the doctor across the way does it cheaper, more hospitals will be inclined to hire doctors in foreign countries and our own doctors will be out of jobs or suffer significant salary decreases. If I was certain that this type of outsourcing were putting American radiologists out of a job I would go from being indecisive to decidedly no. Debates are numerous for and against outsourcing and solutions have been suggested for this issue. Ron Hira suggests that, “decoupling health-care plans from the employer and making the plans more portable would be an important step, since U.S. companies now bear the costs of health care while rivals in countries with government-sponsored care don’t” (Hira, n.p.). If there was a shortage of personnel in the U.S., then if they needed to use personnel from other countries temporarily that would be understandable until the medical profession could market enough students to fill the shortage, but that should still be the goal. Proponents of outsourcing debate that both companies benefit from outsourcing. David Ricardo pointed out that, If one country is better at making wine and the other bread, both countries come out ahead if they specialize their skills and then trade with each other. Outsourcing is nothing more than trading services, instead of goods, across international borders (Ricardo, n.p.). I think doctor’s should be obligated to tell the patient whether the tests are being read if the patient wishes to know because information like who reads the test, his medical background will help the patient understand how a diagnosis was reached and lend credibility to it. Also, the patient’s medical attention is personal and the patient should have access to any information regarding her personal health. Plus, fees are being paid for radiology services and therefore the patient has a right to be aware of who is providing the services. 3. I do not believe all global businesses would be willing to subscribe to a global code of conduct. There are cultural differences between companies that would conflict with a general global code. There would be many companies willing to comply, but most would come from countries that have similar systems in place, such as democratic societies. However some would find it awkward to follow the global code of conduct because wither their political system would collide or a religious or cultural belief might limit them. Opponents of a global code of conduct argue that, “such codes superficially put "a human face" on exploitative capitalism or damage poor workers chances to earn much-needed income” (n.a., n.p.). The code of conduct would have to be very vague in order for all global companies to be willing to subscribe and it would still be a matter of interpretation which can be very subjective. This would be very close to and honor system which appears to be in place already. A global code of conduct would be the beginning of a series of increasingly strict and limiting regulations that would lead to certain mainstream global companies controlling global enterprise and world economy. It would be easier to allow companies to follow the business practices and customs in the country you’re doing business in because both companies would be considering the cultures and customs of the other and acting a manner appropriate for conducting business efficiently. There would be no rules to worry about that didn’t apply to the situation. The companies would enjoy a level of freedom in decision-making and the relationship between companies would not feel forced and mechanical, but would develop naturally. With this type of freedom companies could experience problems if a company decides to disregard the customs of the country they’re doing business with which is why companies have to make it part of their missions to ensure relationships are diverse, open-minded, courteous and considerate. 4. There are some who believe that the morals of a company have nothing to do with the consumer and companies are not obligated to follow procedures based on morality. Economist Milton Friedman argued that, “there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits" (Friedman, n.p.). When I go shopping, I do not feel consumers pay attention to how transparent the company is. I don’t think consumers really care about whether a company is moral or not. There are two factors that influence the extent to which consumers are involved in the morality of a company. The value of the products the company sells to the consumer or the consumer’s need for the product and the level of awareness the consumer has about the business ethics of the company of how familiar the consumer is with the company’s actions. We will use a cosmetics company as an example to demonstrate how these two factors contribute to consumer involvement. A woman goes to the cosmetics section of a store and selects a few products she is familiar with although she doesn’t know much about the company other than the name on the package. As she is leaving, the cosmetics department another woman enters and sees the products in her basket. She tells the first woman that the company that makes those products conducts animal testing to improve their products. She encourages the first woman to get a different product. The first woman admits she does not approve of the fact that the product is tested on animals, but is unsure of what she wants to do. This is where the second factor comes in. The woman will decide her need for the product based on several questions. How long has she been using this product? How useful is the product? Can she go without having this product? Is there an acceptable substitute for the product? Once she answers these questions the woman will realize how strong her need for the product is. If her need is greater than her concern for the company’s actions, she will purchase the product regardless. If her concern outweighs her need, she not purchase the product. 5. The positive effects of whistleblowers in the media is that it brings attention to problems that would otherwise be kept quiet and hidden. It allows fair treatment of all employees and it allows these who are a victim of or witness discrimination to come forward without the fear of being threatened, fired, or discredited by others. The negative effect is that it takes the issue too far sometimes and innocent people can be affected because someone claims they saw something or had something happen to them just to get attention or revenge. Sometimes there is a misunderstanding because the whistleblower makes a mistake and blows the whistle too early. My view of whistle blowing is that it needs to be taken very seriously and the whistleblower must be certain without a doubt that what they are saying occurred is complete fact. In each situation, the company should carefully analyze all sides of the issue without reaching hasty decisions. I feel there should be no automatic punishment because the circumstances in each situation are different and should be handled accordingly. Whistleblowers lose legitimacy in the eyes of their viewers in a few ways. If their story changes or they confuse the facts or can’t provide specific details on the events. This makes it look like the story is made up. If the whistleblower has a history of whistle blowing in the past that has turned up to be unfounded, the public will lose faith in the whistleblower. If the whistleblowers past shows immoral behavior, especially in relation to their claim, the public will doubt the legitimacy. Works Cited "Sarbanes-Oxley." Encyclopedia of Small Business. Thomson Gale. 2007. Encyclopedia.com. 4 Dec. 2009 http://www.encyclopedia.com. Hira, R. “Outsourcing: Where’s Uncle Sam?” 2009. The Debate Room. 6 Dec. 2009 www.businessweek.com. Ricardo, D. “Outsourcing: Where’s Uncle Sam?” 2009. The Debate Room. 6 Dec. 2009 www.businessweek.com. “Series 2, No. 4 (Fall 2000): Who Can Protect Workers’ Rights? The Workplace Codes of Conduct Debate” Carnegie Council: The Voice for Ethics in International Policy. 6 Dec. 2009. www.cceia.org. Friedman, M. “Six Facets of Ethical Leadership: An Executive’s Guide to the New Ethics in Business.” Business and Organization Ethics Network, November 11, 2007. Electronic Journal of Business Ethics and Organization Studies. 6 Dec. 2009. http://ejbo.jyu.fi. Read More