18 Nov Discuss how disclosures of a code of ethics by senior management could have a positive effect on public confidence and influence investors’ behavior
Order Instructions
A). Ethics
The U.S. Securities and Exchange Commission (SEC) released its final rule to implement a code of ethics under SOX Title 404. The stock exchanges have proposed that each company listed on the exchanges publish its code of ethics.
• Discuss how disclosures of a code of ethics by senior management could have a positive effect on public confidence and influence investors’ behavior. Discuss the consequences of not establishing a code of ethics. Support your position.
• Evaluate the importance of senior management in setting the tone for the application of the company’s code of ethics and promoting positive employee behavior, improved decision making, or the willingness to report unethical behavior of coworkers.
• Recommend at least two policies that might encourage employees to report unethical behavior.
B). Internal Control Environment
Designing effective internal controls is the responsibility of management in almost every company. In some cases, there are deficiencies in the internal control environment of a company. Consider how discrepancies between the design and the implementation of internal controls may occur within any given company.
Compare the designs of your choice of two internal controls. Determine which is the preferred design for the implementation of internal controls and why it is more likely to detect accounting irregularities. Provide at least two reasons why the preferred design for internal controls is more effective than the other design. Provide a rational for your choice.
