Article Review Format Guide Essay

The obligate discusses whether the Sarbanes-Oxley Act and the subsequence laws were the correct solution for the problems that arose from the Enron and WorldCom bankruptcies. The article illustrates how the different rules and legislature affect different size business, and the ramifications that resulted for companies that must follow the Sarbanes-Oxley Act. The authors of the article also conducted a study on whether or not fraud of the financial statements was in direct correlation of businesses filing bankruptcy (Nogler & Inwon, 2011, p. 68) like in the cases of Enron and WorldCom. The results found that the larger the company that filed bankruptcy the more likely that securities fraud litigation and general overstatement of the revenue and assets of the company occurred (Nogler & Inwon, 2011).LEGAL ISSUE ratified issues were rampant in the article. For instance, with the issuance of the Sarbanes-Oxley Act of 2002, companies chose to go dark to no longer trade publically, (Nogl er & Inwon, 2011, p. 67) in order to not have to comply amply with SOX. The article also address whether it is fair or justto make smaller companies follow the same exact rules and fines of such articles as Article 404 of the SOX Act.managerial PERSPECTIVEFraud is a real threat to the financial stability of a corporation and even the country. The legal issues presented in the article show how modify fraud truly is. Of the over 1,200 companies that filed for bankruptcy in the study, 77.8% had some sort of fraud (Nogler & Inwon, 2011). These numbers show that laws like Sarbanes-Oxley are justified in difficult to stop the illegal actions within the finances of a corporation by making people responsible for their actions and the actions of those around us. The creative reporting methods that people purpose in ponzi schemes and recording of financial information needs to be highly monitored to prevent losses for stakeholders. Realistic solutions include more laws for the betterment of the corporate world. Laws that cling to individual employees like auditors and Certified Public Accountants, because as it stands now all liability falls to only a few people like the chief financial officer or CEO, when in fact there are instances when they too need protection. Small businesses that wish to go public should have similar laws designed for their size and not just an umbrella law that might prevent the company from growth.ReferenceNogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act Was the one-size-fits-all approach justified? Journal of Corporate be & Finance (Wiley), 22(4), 65-76. http//dx.doi.org/10.1002/jcaf.20691