Soumey Corporation and Sarbanes Oxley Act - Coursework Example

There are enough indications of the prevalence of inappropriate incentive systems and some sorts of unfair favoritism. In addition, serious flaws have been found with the HR management as it shows unethical discrimination to Spanish workers by assigning them to all-night shifts.

2. Obviously, Jerry has a moral duty to report the felony to the outside authority i.e. Securities and Exchange Commission (SEC). If he does not report, he too will be becoming part of a conspiracy that has been going on within the organization. Since the audit flaws are not merely inadvertent occurrences, it is difficult for Jerry to fix the organizational inconsistency. Apparently, except Jerry, all other members of the board are aware of the immoral practices going on within the various areas of the organization. The absence of proper documentation, according to the Sarbanes-Oxley Act is a punishable crime. Changing or falsifying records with the objective to impede the legal investigation has been identified by Jerry. According to SOX sec.404, management should conduct an evaluation that is sufficient to provide it with a reasonable basis for its annual assessment, and moreover, if the evaluation process identifies material weakness that should be disclosed in the management’s annual report with a statement that Internal Control over Financial Reporting (ICFR) is insufficient (Bainbridge, 2007).

3. The make-up of the board of directors of Soumey is not at all ethical. They have been highly influenced by racial feelings and chauvinism. To illustrate, their comment on the Spanish workers is beyond any limits of organizational ethics and legal compliance. Alan states “these people know how to work and keep quiet…” In the same way, when Jerry says about the issues he overheard John responds that since the company is going into a recession, the board has to cut a few corners to meet the dividends up to the market expectations. It shows how feeble are their moral reasoning and organizational ethical values.

4. Being one of the board members, Jerry is also answerable to the law for the problems associated with a social and ethical audit in Soumey Corporation for the last three years. Although he is not directly involved in the immoral practices, legal implications will have the reasons to count Jerry as one of the perpetrators. However, from a logical point of view, Jerry is not liable for the mistakes and is morally good because he wants to report them to the officials. Moreover, he has made reasonable attempts to preserve the ethical aspects of the company regardless of his limitations.