ethicsfinal - The Sarbanes-Oxley Act was passed in 2002 and...

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The Sarbanes-Oxley Act was passed in 2002 and was sponsored by Senator Paul Sarbanes and Representative Michael Oxley; its purpose is to help monitor and guide corporations and to build confidence with investors (stakeholders) by protecting their investments. Pros of the Sarbanes-Oxley Act include restoration and continued investor confidence through the reduction of conflict of interest between auditors and consultants and the companies, and the reduction of conflict of interest between securities analysts and the investment-banking sector. Cons of the Sarbanes-Oxley Act include its expense and the fact that it is government interference into the private sector; another disadvantage is that it may impact the amount of US businesses that stay within the US; many may move to foreign countries due to the regulation that the Sarbanes-Oxley Act brings. Corporations have responsibilities to consumers; these responsibilities include: the duty to truthfully inform their consumers of a product or service’s intended use and purpose; the duty not to misrepresesnt or withhold information about a product that would hinder a consumers’ freedom of choice; the duty not to force or take advantage of consumer buying through fear or other ways to restrict rational choice; the duty to take “due care” to prevent foreseeable injuries or mishaps a product may inflict on consumers (Weiss, 2009). Consumers have the right to safety, the right to have free and rational choice, the right to know and have easy access to educate themselves in terms of product selection, the right to be heard or to act reliably on complaints in regards to business transactions/products, and the right to be compensated for harm done due to a faulty product (Weiss, 2009). The four principles that Pastin outlined in regards to effective organizational culture are: 1) high-ethics firms are at comfortable interacting with internal and external stakeholder groups; this is because their stakeholders are able to trust the company. 2) high-ethics
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This note was uploaded on 01/30/2011 for the course GEB 6376 taught by Professor Kest during the Spring '10 term at Hodges University.

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ethicsfinal - The Sarbanes-Oxley Act was passed in 2002 and...

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