HealthSouth SOX Violations Research Paper Example | Topics and Well Written Essays - 1250 words

HealthSouth SOX Violations - Research Paper Example The mandating of not for profit corporations to utilize the SOX (2002) will improve their operations significantly towards the reduction of fraud. The SOX (2002) provides for ethical management practices. For that reason, whereas profit corporations do not have shareholder protection, there is a need to protect donors of nonprofits (Dalton & Dalton, 2011). The SOX (2002) prohibits the occurrence of corporate fraud among public companies. The bill was enacted after the occurrence of corporate scandals prior to 2002 such as Enron and WorldCom. The scandals resulted in billions of dollars of losses in investor value due to the collapse of these companies as well as the overall negative effect to the stock exchange of the United States. In the establishment of the SOX (2002), the goal was to promote ethical behavior among corporate executives across all industries. Hence, in the evaluation of the SOX (2002) in the healthcare industry, the assessment is a reflection of the performance of the SOX (2002) generally. In the healthcare industry, the SOX (2002) has promoted the reduction of the excesses of financial fraud. The full implementation of the SOX (2002) improved the internal controls of organizations in the healthcare industry. As a result, it improves the audit trails, data integrity, policy and procedures of organizations. Overall, i nvestors within the industry could now enjoy better accountability from the executives of the healthcare organization. The healthcare executives had high ethical standards to meet in light of the SOX (2002) with fines and jail terms providing sufficient deterrents against the occurrence of financial fraud (Coates, 2007). The organization had multiple deficiencies that increased the opportunities for fraud.