3/2/15 Final Paper
Evaluate the challenges that for-profit public companies face from recurrent scandals, political attacks and alternative corporate structures such as the B-corp.
“Public companies have been the locomotives of capitalism since they were invented in the mid-19th century. They have installed themselves at the heart of the world’s largest economy, the United States.”[Economist, p.1] “Public companies have shown an extraordinary resilience. They have survived the Depression, the fashion for nationalization, and the buy-out revolution of the 1980’s.”[Economist, p.8] Even though they do face some mighty large challenges ahead, they will hold strong in the near future but may eventually continue a downward trend as other
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and foreign registrants and as a consequence, non-U.S. firms wishing to trade on U.S. exchanges potentially face increased levels of oversight and costs associated with U.S. listings. A significant concern is that these new regulations affect the competitiveness of U.S. markets in attracting new listings and the regulations drive away firms that would otherwise be trading on U.S. exchange. [Journal of Accounting Research p.1] While there are many criticisms with SOX it would be naïve not to note the praise it has received and the fraud it’s uncovered and/or prevented. One fraud uncovered by the Securities and Exchange Commission (SEC) in November 2009 may be directly credited to Sarbanes-Oxley. The fraud, which spanned nearly 20 years and involved over $24 million, was committed by Value Line against its mutual fund shareholders. The Commission ordered Value Line to pay a total of $43,705,765 in disgorgement, prejudgment interest and civil penalty, and ordered Buttner, CEO and Henigson, COO to pay civil penalties of $1,000,000 and $250,000, respectively. Sarbanes Oxley Act has been praised for nurturing an ethical culture as it forces top management to be transparent and employees to be responsible for their acts whilst protecting