Current status and impacts of the Sarbanes-Oxley Act
Sarbanes-Oxley Act is meant to restore public confidence in the reliability of financial reporting and to improve audit quality (Ernst and Yong, 2013, p.1). Although, there are still some changes to make, the act has caused some significant improvements of the audit quality in the U.S. The document has established the Public Company Accounting Oversight Board (PCAOB) which is responsible for independent oversight of public company audits. It is also caused strengthening of corporate governance by passing “the responsibilities for the external auditor relationship away from corporate management to independent audit committees” (Ernst and Yong, 2013, p.1). According to Ernst and Yong (2013) “Prior to SOX, the process for the selection and assessment of the independent auditor typically was controlled by management… Audit committees now play an essential role in the corporate governance framework by overseeing the quality and integrity of the company’s financial statements (p.6).
The act created “whistleblower programs, CEO and CFO certification requirements and stricter criminal penalties for wrongdoing, including lying to the auditor and (Ernst and Yong, 2013, p.1). Before the act was passed “the US capital markets were roiled by revelations of financial wrongdoing at numerous major companies” (Ernst and Yong, 2013, p.1). This situation was dramatically damaging investors, pensioners, communities and markets. The described and some and other measures have significantly improved the reliability of corporate financial reporting. For example, a November 2009 study discovered that the rate of financial restatements was 46 percent higher for companies that did not fulfill all of the Sarbanes-Oxley provisions (Ernst and Yong, 2013, p.1).
The act has also received a certain share of criticism since the regulatory and legislative changes of 2012. Some opponents of the act say that it deprives companies from risk-taking and competitiveness (Hanna, 2014). The main share of criticism concerns Section 404 which relates to internal controls over financial reporting companies (Ernst and Yong, 2013, p.1). Critics were saying that this part makes small companies more vulnerable, because costs of external auditors are too high for them (Hanna, 2014). However, in 2008 the document were amended and “all companies defined within the Act as Emerging Growth Companies were exempted from complying with §404” (Ernst and Yong, 2013, p.18). Since the first issuing of the act in 2002 there were several Amendments in 2008 and 2010 (Ernst and Yong, 2013, p.18). These changes took away the most of severe criticism around the document. Although, now there are still some negative opinions about the act, the general public opinion has shifted to more positive (Hanna, 2014).
The Core Competencies of Harley-Davidson Motor Company Motorcyctles
There eight core competencies of Harley-Davidson motorcycles which helped the company to succeed - strong brand, lifestyle, customized design, distinctive engine sound, a properly educated dealer system and customized design (Wang, 2007, p. 23). Harley-Davidson motorcycles do not have the best performance, speed, price and not even environment friendly. However, H.-D. attributes such as the specific engine sound, lower leather seats, chrome finishing and high …