Regulatory Measures - Essay Example

ns into effect on 1st November, 1991 after USSC discovered that several organizations lacked ethics and compliance programs and failed to meet defined standards. Most organizations had substandard programs that fallen short of meeting the goals and expectations of the Sentencing Commission. The Sentencing Guidelines have greatly encouraged American businesses to create effective ethics and compliance programs (ECEPs). The FSGO seldom applies to large companies today because virtually all their crimes are adjudicated in the courthouse.

However, the Guidelines still apply in the courthouse even as Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) vastly influence or contribute to out of court settlement (Ferrell et al. 2008). The goal of the FSGO is to incentivize American corporations to aim high and self-police on ethics. According to the FSGO’s Advisory Board, more recognition and consistent promotion of ethics and compliance programs by the enforcement of the US would significantly incentivize business organizations to invest more in self-policing efforts against corporate crime. The U.S.

Congress passed Sarbanes-Oxley Act (SOX) in 2002 to protect the public and shareholders from fraudulent/corrupt practices and accounting errors in the enterprise. The legislation sought to improve the accuracy of corporate disclosures. The Securities and Exchange Commission administers Sarbanes-Oxley Act (De & Argosy University, 2006). Apart from improving the accuracy of corporate disclosures, SOX sets deadlines for compliance and publishes rules on the requirements. The US Congress enacted SOX in response to increased cases of high-profile financial scandals in early 2000s involving large companies such as Tyco, WorldCom, and Enron.

These scandals rattled investor confidence across the country. Two US Congressmen, Paul Sarbanes and Michael Oxley, drafted the act, which primarily aimed at improving accountability and corporate governance (De &