1. Reply to Toni:The Sarbanes Oxley Act is a law that is mandatory for public companies listed on the US exchange or with over three hundred shareholders. It was signed into law by President Bush on July 30, 2002, with the goal of keeping corporate leaders honest, holding them to ambitious standards, and punishing those that cause deception and reckless practices that raise prices and can ruin a company or jobs (Holt, 2007). Management’s responsibility in preparing financial data includes establishing a “control environment.” This is just a term used to describe a company’s maintenance of integrity, ethical values, responsibility, and operation style. This responsibility originated from multiple articles included in the SOX act that hold companies accountable for their actions when handling financial material (Holt, 2007).
Reference
Holt, M. F. (2007). The Sarbanes Oxley act: Costs, benefits, and business impacts. Elsevier Science & Technology.
2. Reply to Andrew
These are the primary things that stand out to me. (Besides the other clerk not stepping up haha). I think we all got a quick earful about separation of duties which I think this topic was geared at. At this point, No-one knows who Jill is or their intent but it is safe to assume that Jill will hold all the cards and be able to rob Hanson blind if empowered to do so. Jill may just be an honest and eager employee but trusting people with too much is the worse type of betrayel if that trust is abused. This is why, according to Giblin,C. & Hada, S(2008), Separation of duties prevents the ability of fruadulent of activity to be so easily executed. Maybe Jill only takes a few dollars a day or week or month, essentially skimming off the top as they call it. Martha will be busy browsing for new items and Jill might even support her and bring coffee and gifts that skim-money paid for and Mrs. Hanson will have the false impression of hitting the employee jackpot. This could go on for years and even grow companies together if un-noticed. This simple empowerment of all duties, could lead to milliions lost in investment and growth opportunities. It’s not just skimming, its someone’s livelihood being robbed in these scenarios. It would be better for Martha to separate and empower duties to each staff member and perform her own deposits/audits randomly and as needed. This would enable the separation of duties fail-safe technique and random audits would make a planned joint effort to thwart the boss, nearly un-plannable or at least difficult. I think this would present the potential risks of success for Martha’s Business and also provides an avenue for success also.
Giblin, C., & Hada, S. (2008, October). Towards Separation of Duties for Services. In The 6th Int. Workshop on SOA & Web Services Best Practices Committee, OOPSLA, Nashville.
