Business Ethics: The Sarbanes-Oxley Act (Other (Not Listed) Sample)
The student was required to provide answers to two questions on business ethics. In the first question, the student was required to discuss what The Sarbanes-Oxley act entails. In the second question the student was required to discuss whether the law provides any ethical business requirements for privately owned companies and small businesses. The paper format was apa and the number of sources required was three. The word count was 350 words.
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Business Ethics
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Business Ethics
Question 1
The Sarbanes-Oxley act provides ethical requirements that publicly traded companies, and soon not-for-profit organizations are supposed to observe to promote good governance, accountability, and proper financial reporting. This act is supposed to shield investors of publicly traded companies from the management’s misrepresentation of financial facts, excessive executive pays, and money loss through management scandals (Orlikoff & Totten, 2004). Since small and privately-held businesses do not have other shareholders except for the partners and the company’s founders, they do not have an ethical responsibility to the public. Nevertheless, those entrusted with running the business are responsible to the other partners and shareholders who may not be involved in the company’s daily running. Further, they have an ethical responsibility to their creditors and suppliers by accurately representing their financial position for these stakeholders to determine whether they are insolvent or not. The business owners also have an ethical responsibility to their customers to ensure that they sell them quality products and disclose any faults that the products might have. Finally, they have an ethical duty to their employees to pay them on time and disclose financial constraints, which may prevent the business from doing so (Rogers, 2012). All these requirements are meant to ensure fairness while doing business.
Question 2
The law has not provided ethical guidelines for privately owned and small businesses, but it can do so to protect the interests of other stakeholders. For instance, it should guide financial reporting and ensure that creditors and suppliers are furnished with such reports to enable them to make informed decisions on whether to lend or supply to the business. It is not unusual for suppliers and creditors to discover too late the company they have been supplying goods and lending money to is unable to settle their liabilities (Pearce & Lipin, 2012). Nevertheless, whereas some of the business responsibi
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