Business Law Case Study
Question 1
In the presented scenario, it is clear that the CFO, as well as the CEO requirements of certification needs, will pose great potential outcome in decreasing the fraud conduct of the corporation (Cheeseman, 2014). Sarbanes- Oxley 2002 Act holds that the statute of the federal which established rules in developing corporation governance, fraud prevention, and addition of corporation’s operations transparency. This can thus be reinforced by Sarbanes- Oxley 2002 Act which is developed primarily to prevent the occurrence of deceptive actives because the act contains an accurate and clear corporate governance operations transparency. This rule is therefore objected at preventing the occurrence of moral and behaviors that are characterized by fraud (Cheeseman, 2014). The requirements will help in reducing the chances of fraud occurrence in the corporation by reducing any possibility of inaccuracy or misunderstanding in all the corporate operations. In addition, the limitations of providing accurate information in regard to the corporation’s organization by both CFO and the CEO will be eradicated.
Question 2
It is thus certain that Sarbanes- Oxley 2002 Act will encourage more moral behaviors from both the directors and officers of the corporation. The act will additionally promote moral behaviors through providing a strong control surrounding. An organization that portrays strong governance provides ethical values, discipline and a developed employee’s structure that helps the rest to emulate the behaviors (Cheeseman, 2014). Moral behaviors will additionally be promoted by the act through documentation improvement. This will help in developing responsibilities as a very employee will be accountable for their individual actions. Increasing transparency will eliminate fraud activities and in turn encourage moral actions through engaging in activities that are objected at benefiting the corporation and not individual’s interests. Processes standardization is another model that shows how the act will promote ethical conduct (Cheeseman, 2014).
Reference
Cheeseman, H.R. (2014). Contemporary Business and Online Commerce Law. Prentice Hall, 8th Edition.
