Sarbanes Oxley Act
Sarbanes-Oxley Act of 2002 has been described as the most far-reaching legislation affecting business since the passage of the 1933 Securities Act.
There is one part of this process that is beginning to have a positive effect on the companies under SEC jurisdiction. The events of the last 5 years have made it clear to all areas of a company that there is a right way to do accounting and if you do not do it right then the company is in trouble. This has caused many who before considered accounting a necessary evil. One that took a lot of time away from operating the company. There was a company marketing manager who once thought it did not matter as long as revenue and expense got recorded in just any account. To his credit all expense and revenue was recorded–some in the wrong year–some as capital expense when it was operating expense. He/she figured that any recordings that were in the wrong account someone in accounting would find them and change to the right account. Also, if it got by the accountant then the auditors would find it and suggest the company make correcting entries. And it the auditors did not catch the items then who would care. Along came the events of the late 90’s and early 2000’s and it made her/him realize the real importance of doing it right and making sure it was reported correctly.
From what I can tell there has been a substantial increase in the awareness of the importance of doing proper accounting in all departments of companies under SEC jurisdiction. Do any of you have examples that back up this theory?