Oxley Section 301.4

The CEO and all senior financial officers also have an additional code of ethics. They are responsible for full, accurate, and timely disclosure in reports required to be filed by the SEC. Each member is also required to report any material untrue fact that comes to their attention or any deficiency in the design/operation of internal controls. Each member must report any violation of their code of ethics or any violation of other laws, rules, or regulations (Walmart 9). This additional codes of ethics is important because it holds all of the executives accountable for their actions. This should aid in preventing fraudulent reporting by management because this code can be cited when looking at disciplinary action.

In an age when accelerated communications contribute to growing perceptions of organizational improprieties, the ethical and legal implications of whistleblowing have become a major topic of discussion. According to Lawrence and Weber (2014), whistleblowing is an employee disclosing apparent organizational misconduct to the government or media; however, this reporting of information should come after attempts at going through proper channels in order to persuade the organization to take appropriate actions has been ineffective.

While reporting fraud on the government can be personally rewarding from a moral, ethical and financial standpoint, it can also be very difficult in terms of the stress and anxiety associated with standing up to powerful corporate interests. The decision to become a whistleblower can be a life-altering experience that was about to overtake General Motors. This could potentially have an adverse effect on the whistleblower’s employment, social activities, and other aspects of his or her life (McEldrew Young, 2016).

Whistleblowing implies the imperative necessity to alert others (company) about immorality issues, including illegal activity, happening inside the organization. For the employee who decides to blow the whistle “usually brings to he/she undesirable consequences.” Some consequences are like threats, loss of employment, and social rejection. (Chiu,R. 2003)

The Whistle-blower Policy is a concept that organizations encourage their employees and external clients to report any improper activities such as fraud, corruption, or any other illegal actions. (UC Berkeley, 2017) The Whistle-blower policy is from the 1960s, but it is nor effective policy.((Santa University, 2017) Most of the employees cannot raise their issues. Usually, the problem is concealed rather than solve, due to the lake of protection of privacy of whistle-blower, until the authorization

Sarbanes-Oxley Act contains 11 titles, which provide the specific guidelines and regulations for financial reporting. The titles are: Public Company Accounting Oversight Board (PCAOB), Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflict of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns and Corporate Fraud Accountability. The introduction of the act states that it is an act “to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes”. (Sarbanes-Oxley Act, 2002)

If the CEO received a report of his misconduct, the business would surely fall as the boss was the key person who kept the business running steadily. Most often, this event can cause massive damage to employee’s salaries, and affect the economic values as well. Furthermore, one may argue that whistleblowing may violate individual rights as employee’s signed a contract abiding by company’s standard. In an article called “Whistleblowing and Professional Responsibilities” by Sissela Bok, she emphasizes “employees have a loyalty oath of confidentiality and secrecy” (Bok 178) which may violate human rights as well. Individuals often view that they often have the right to privacy. However, whistleblowing to the company can create a breach in loyalty. Similar to a friend posting every secret about the person, employers contain information to avoid mass media and future damages to the community. Therefore, whistleblowing may create further chaos and future problems. While whistleblowing has its flaws regarding the standards placed on the employee, moral and ethical rights are higher than what an employer can offer for their

To be careful “independent” under SOX rule, an audit committee member may not agree any consulting, review or other compensatory costs from the issuer or be an “associated person” of the issuer or a supplementary. requires companies to release whether they have a financial expert. Having someone with financial knowledge puts the audit committee in a stronger position to examination and task the company’s financial statements, decide that

Keywords: Sarbanes-Oxley Act of 2002, (SOX), managerial accounting internal controls, internal audits, management, corporate fraud, ethics responsibility, whistleblowing, white collar crime, greed

In this paper, I will cover the characteristics of a whistleblower provide an example of one and cover how the Sarbanes-Oxley Act would be used in this particular event.

First, we need to grasp how Codes of ethics were created and if formulated from a standard boilerplate Ethics program. As stated by FindLaw.com under ‘Corporate Ethics and Sarbanes-Oxley, in order “to create code of ethics, an organization must define its most important guiding values, formulate behavioral standards to illustrate the application of those values to the roles and responsibilities of the persons affected, review the existing procedures for guidance and direction as to how those values and standards are typically applied, and establish the systems and processes to ensure that the code is implemented and effective.” (Navran, 2003) A company can work to promote ethical behavior; however, the process is “not easily created from boilerplate.” (Navran, 2003) The process has been broken into five sections which can be seen below from Corporate.FindLaw.com, on the same page by Navran.

For example, The Audit Committee of The Board of Directors has established procedures to receive, retain and treat complaints regarding fiscal improprieties, accounting, internal accounting controls or auditing matters and to provide for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. Employees may submit good faith complaints regarding accounting or auditing matters without fear of dismissal or retaliation of any kind (Johnson & Johnson Investor Relations, 2006). All employees are responsible for

After online research, key characteristics for the operation of an effective corporate whistleblower hotline identified include:

2. What measures can and should be taken to make it easier for corporate employees to ‘‘blow the whistle’’ on a fraudulent scheme they uncovered within the firm?

To help individuals report, it is suggested the management should start a whistle blowing hotline. Such a hotline can be a critical component of the company’s anti corruption efforts as tips can be a common way of detecting frauds.