You are required to support your position by using at least two references from an academic journal or prominent business publication (e.g., The Wall Street Journal, Barron’s, Fortune, Investor’s Business Daily, etc.). Additionally, one of these references must be recent. A recent reference is one that has a publication date that is less than one year old as of the beginning of the semester. Importantly, references from websites do not qualify unless those websites are part of a reputable print publication. For example, Investopedia.com can be used, but it does not count as a reference that satisfies the criteria of a recent reference. 250 words each discussion.
What does it mean to say that managers should maximize shareholder wealth “subject to ethical constraints”? What ethical considerations might enter into decisions that result in cash flow and stock price effects that are less than they might otherwise have been?
Module 2 Discussion Topic:
Investigate in detail the provisions of the Sarbanes-Oxley Act of 2002 (SOX) from the Internet, periodicals, or academic journals. Select one of the provisions of the Act, briefly describe it, and indicate why you think (or do not think) financial statements will be more trustworthy if company financial executives implement the provision of SOX you have chosen. In the Title of your initial response posting, please name the provision (for example: Section 404) so your classmates can see which provision you have chosen to analyze. Please provide reference(s) for your response(s).
Website for the Sarbanes-Oxley Act of 2002
You can use Google and enter the Sarbanes Oxley Act of 2002 to get thousands of websites to get you started on your response to this question. Below is a good one that also gives you a great, straight-forward summary of this Act and its importance to the financial markets, as well as a list of the Sections of the Act with links to the details of each Section: Sarbanes Oxley Act of 2002 Summary or www.soxlaw.com/
Introduction of DQ2
The Sarbanes-Oxley Act of 2002 was landmark legislation that tried to protect investors, shareholders, and ultimately employees from firms and their management that issued fraudulent or misleading financial statements to the public. SOX has many Sections, all of which have now generally been fully implemented and tested in business, in the field, and in the courts since that date. Many senior executives found guilty of violating various Sections of SOX have been jailed and are still in jail as a result of their violations of SOX. Ultimately, our free-market principles are compromised and tested when firms issue fraudulent or misleading financial statements which result in either unfair or illegal profits being earned by the management of these firms or hurt investors.
Module 3 Discussion Topic:
In early 2020, the United States government had more than $23 trillion in debt (approximately $80,000 for every U.S. citizen) outstanding in the form of Treasury bills, notes, and bonds. That number is now growing due to the current coronavirus situation to over $30 trillion. From time to time, the Treasury changes the mix of securities that it issues to finance government debt, issuing more bills than bonds or vice versa.
With short-term interest rates near 0 percent right now in the middle of 2020, and still very very low, historically today, suppose the Treasury decided to replace maturing notes and bonds by issuing new Treasury bills, thus greatly shortening the average maturity of U.S. debt outstanding. Discuss the pros and cons of this strategy.
Introduction of DQ3
This is a very real-life question that our Government has been facing since the financial crisis of 2007-2008 and again now with the coronavirus in 2020. With interest rates falling after both crises to historical lows, which they are still by and large at today but will begin rising slowly again, the Government has a tough decision, especially with regard to the old debt it issued at higher interest rates to finance the Government. Refinance that debt? If so, for how long of a period of time and at what rate of interest are buyers willing to go out when buying the new Government T-bills, bonds, etc.?
Reminder: Depth and Breadth of Your Responses
I find that Google searches are a great place to find a reference(s) for postings in addition to the course textbook.
In addition to the course textbook, it is sometimes a good idea to get another angle on a DQ like this one.
A reminder that your DQ postings should have some depth, breadth, and length to them, especially those made on Sunday nights before the DQ responses end. Well-written DQ postings are also very much appreciated.