Ethical Decision Making Essay Example | Topics and Well Written Essays - 500 words

Ethical Decision Making - Essay Example Wayman reported in 2011 that in order to combat accounting fraud, US Congress enacted financial reform through the Sarbanes-Oxley Act of 2002 (SOX), which held entities more accountable for their bookkeeping methodologies by requiring senior management to attest to the accuracy of the data provided on the financial statements, as well as mandate companies to establish internal systems of checks and balances to police those crunching the numbers. The legislation lent more credibility and respect for the Generally Accepted Accounting Principles (GAAP) by reinforcing them as law rather than mere ethical guidelines. GAAP is used to create parameters for corporate accountants and auditors when keeping records of transactions and balancing budgets. The rules place emphasis on revenue sources, itemized balance sheets, and numbers of outstanding shares. It is designed to create absolute transparency for investors and restore confidence in companies’ financial statements.