Academia de Studii Economice Bucuresti

Amfiteatru Economic
Facultatea de Business si Turism

Rules on Business Ethics. SOX Standard

Author:Lector dr. Cristina Drumea



Keywords:SOX standard; business ethics; corporate fraud; Enron

The Sarbanes-Oxley law, officially named „Public Company Accounting Reform and Investor Protection Act” was adopted in 2002 in the United States in order to review the accounting practices and to rebuild community’s confidence in the Public Companies Financial Reports. What were the events that triggered the implementation of such ruling? The answer lays in the over-displayed cases of corporate frauds as Enron, WorldCom and other famous bankruptcy scandals, all of them having the same roots into the „creative accounting” practices. This concept refers to diverse actions taken in order to bewilder, hide and embellish the economic and financial reality of the companies throughout fraud Accounting Reports. Business environment is anyway subject to various demands to rule against sophistication of corporate frauds, thus legislation towards ethics in business was to be expected. Question is how these new rules and regulations will become effective for the purpose they were created, given the fact that they determine as well negative effects such as the increase of the companies’ expenses for financial and audit services or the limitation of free action once the Surveillance Commission [8] has mandate to stop their transaction when appear to be doubtful. This kind of standards is for now applicable only in the American business environment, but it already has effects on the companies everywhere, including the Romanian ones. This article explores the way this may occur, as well as the pros and cons of the implementation of such standards in our legislation.
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