The Sarbanes Oxley Act - Essay Example

Class Discussion 1: Topic A

The Sarbanes Oxley Act (SOX) was created in 2002 in order to instill confidence in the investor community after a series of economic scandals including the Enron and WorldCom debacles (Nysscpa, 2005). The stock market is only composed of public corporations, not private entities. I believe that governmental regulations such as SOX should only apply to public corporations. The cost of implementation of the Sarbanes-Oxley Act is very high. The average cost of complying with SOX is approximately $4.36 million (Tech-faq). Based on the exuberant cost of complying with SOX it is not reasonable for the government to force small firms to comply with SOX. Despite the fact that I am against the implementation of SOX in the private sector this does not mean that the government should not promote ethical behavior in the financial dealings of private corporations. There are other stakeholder groups other than investors that rely on the validity of financial reports to make decisions regarding private corporations. Three of those stakeholder groups are lenders, suppliers, and employees.

Class Discussion 1: Topic B

To test the value of an academic education from a particular university I would use some other alternative methods that do not necessarily take into account the cost of acquiring the education. The cost of education will vary by state or country, university, and career field among other factors. A simple way to test the value of a college education is by comparing the average salary of one school’s graduates vs. another school’s graduates. Another good metric to measure how effective a college education at a particular school is to measure the unemployment rate among the graduates of different colleges. Universities with low employment rates among their graduates are doing a good job of fulfilling the purpose of college which is to graduate to obtain a good job in the workplace.

Class Discussion 2: Topic A

As an investor of a blue chip company that has the opportunity to vote for a change from statutory voting to the cumulative voting method, I would vote in favor of the change. The advantage of the use of the cumulative voting method for the small investor is the fact that under this method the shareholders may not give more than one vote to any single nominee (Sec, 2004). This limits the power and controls large investors have in comparison with the use of statutory voting methods. If I was handling the account of an institutionalized investor I would vote to keep the old statutory method.

Class Discussion 2: Topic B

There are different dimensions of the marketing environment that must be considered by Burton Snowboards. The firm must consider changes in the demographics of its target customers. For instance, if a lot of new teenagers and twenty-year-olds are moving near the locations where Burton Snowboards are sold this is a good sign for the company. The company should consider the economic conditions. Metrics such as the unemployment rate and average salary of the community are important metrics to consider. Another consideration for the marketing people is changes in the customer taste.