Ethical Dilemmas in the Banking Industry The Sarbanes Oxley Act Essay

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The Sarbanes Oxley Act - Ethical Dilemmas in the Banking IndustryThe Sarbanes Oxley Act poses various dilemmas in its execution in the financial industry. Particularly in its implementation in the spheres of corporate governance. The first involves nonprofit organizations where its effectiveness is dependent on the ethical values of executive leadership. While the Act requires constant reporting and monitoring of the financial operations, it relies on the integrity of the leaders who serve the oversight roles in those organizations (Hess, 2007). The fiscal integrity attached to the Act's objectives is only valid if relevant structures are implemented at every level. That is, there must be ethical considerations in the culture and norms of the organizations for both informal and formal settings. The Act assumes that the organization correctly does auditing to help protect investors and other shareholders from fraudulent reporting (Hess, 2007). The organization's declaration to abide by the Sarbanes Oxley Act is different from the legal obligation of the leadership, which is central in inculcating ethical culture in the organization. Leaders encourage the behavior, and it is through their actions that the Act's success is assessed. It assumes that ethical role models are instrumental in shaping the financial responsibilities of an organization.

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This lacks empirical evidence implying that the Sarbanes Oxley Act in itself raises ethical questions on its reliability and applicability in…

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…to consistently execute their mandate ethically without being compelled by the laws. Thus, the Sarbanes Oxley Act as a tool of reinforcing responsible fiscal management does not ethically hold in all environments. Where then should the Act apply, and to what degree? While it supports the legal expectation of financial organizations to provide honest audits to investors and other shareholders, it leaves a wide gap in encouraging those responsible for reinforcing the values to deploy legal methods to compel other players to behave ethically (Heminway, 2008). It does not define what is legal or illegal regarding the code of ethics of specific organizations. Again, the nature of activities in the different public organizations necessitates….....

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