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Sarbanes-Oxley Act of 2002 - Internal Control

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Internal control is designed to ensure that financial reporting, effective and efficient operations, and to make sure that compliance with laws regulations are met. states this about internal controls "Control environment. The management style and the expectations of upper-level managers, particularly their control policies, determine the control environment. An effective control environment helps ensure that established policies and procedures are followed." At the same time there are things that do affect internal controls.

The Sarbanes-Oxley act of 2002 was established by President Bush in order to regulate internal controls and hold accountable companies that had bad ethical, and management acts within the company. This stopped companies from acts of bribery, bad record keeping, and ethical issues. at the same time this act made it mandatory to report on internal controls to the regulatory act. This is a government office and there for is public. This means that anyone can see these reports and this can affect a company in a positive or negative way. This affects them publicly because it allows others to see the integrity of a company as well as its ethical practices within the company with its employees and customers.

A company that uses unethical internal controls that has reported to the regulatory office that took effect because of the Sarbanes-Oxley act which has a bad report stands to lose business because of it not to mention the fact that the shares of the company will go down. people do not want to do business with companies that have bad business practices such as fraud, ethical issues with its employees, and bad business practices. at the same time investors do not want to deal with a company like this because it is sure to fail in the end. When this happens the company loses money all the way around. this was done on purpose in my thoughts to make companies stand up to the plate with integrity and good sound business practices, because if a company does this they have nothing to worry about when it comes to losing stock prices or customers leaving for a more ethical sound honest company.

At times there are limits of internal control because companies must reliy on its employees to be honest and have integrity too. Internal control is only as good as what the people of the company are when it comes to following the rules and their moral values. for example, where I work we have almost lost a government contract because of lack of pride in the work that was done for the contract. People did not care what the end looked like just worried about get the job done. The company went from having 7,000 seats made for their vehicles to just doing the over flow that other companies could not get done which amounted to a few hundred a year. They did put into place internal controls on the product that they put out on the few seats that they did provide. In the company did regain some of its



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