Sarbanes Oxley Act Violations

Summary

The Sarbanes-Oxley Act makes it illegal to alter, destroy, or conceal documents to obstruct investigations. Melissa, as CFO, failed her fiduciary duty by not reporting fraud and instead helped destroy evidence. The government would likely prevail in this case. Additionally, under the Commerce Clause, the federal government can regulate businesses like Sarahs shoe repair shop if their actions have a substantial economic effect on interstate commerce, such as advertising on TikTok and serving out-of-state customers. Ethical decisions are often influenced by business pressures and incentives, highlighting the importance of compliance and integrity in business practices.

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Sarah owns a shoe repair shop in Normal, Illinois. She typically repairs shoes for individuals residing in the surrounding area. Recently, Sarah advertised on TikTok about her shoe repair business, and she noticed her sales increasing, including a few out of state customers shipping shoes to Sarah to be repaired. Under the Commerce Clause, can the federal government regulate Sarah’s shoe repair business? Group of answer choices Yes, if it is determined that Sarah’s actions have a substantial economic effect on interstate commerce Yes, because when Sarah advertised on TikTok, she reached potential out of state customers, which automatically makes her business subject to the Commerce Clause No, because Sarah’s shop is physically located in only one state (Illinois), Sarah does all her shoe repair work in Illinois, and most of Sarah's customers are in Illinois No, because the Commerce Clause specifically excludes small businesses
The federal government can regulate Sarah's shoe repair business under the Commerce Clause if it is determined that her actions have a substantial economic effect on interstate commerce. Advertising on TikTok and receiving out-of-state customers could potentially qualify as such an effect.
Would you like more details on how the Commerce Clause applies to small businesses, or any other information?
Ethical decisions: (I) Are clear cut and typically right decisions are easy to determine; (II) Should only be made by senior employees and company leaders (III) Can be influenced by business pressures and business incentives Group of answer choices I only I, II, and III I and III III only
The government would likely prevail because:
- Ethical decisions are often influenced by business pressures and incentives (III only).
- Melissa, as CFO, has a fiduciary duty to report fraudulent activities.
- Destroying evidence to obstruct an investigation is illegal under the Sarbanes-Oxley Act.
Would you like more information on the penalties Melissa could face under the Sarbanes-Oxley Act?