Leg500 Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley

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Describe the key characteristics of a whistleblower
Person or any employee who reports the illegal activities occurring in an organization or who has insider knowledge of immoral, or illegitimate practices taking place in a business either through witnessing the behavior or being told about it. Such practices can include illegality, frauds, mismanagement or abuse of power. Whistleblowers can use different channels to report wrongdoings, including internal channels (i.e., within their organization, such as directly reporting misbehavior and incidents to their immediate supervisor, union representative, or human resources department) or external means (i.e., going outside their organization to, for example, a third party ombudsman, an external hotline, or an applicable government regulatory agency related to the type of wrongdoing behavior.
Internal whistleblowing mechanisms for public companies must comply with the provisions of the Sarbanes-Oxley Act of 2002 (SOX). Two of the many corporate governance provisions of SOX place whistleblower-friendly requirements on issuers. SOX section 301 requires the audit committee of every issuer to establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal control, or auditing matters, and to maintain the anonymity of employee complaints regarding accounting and auditing matters (i.e., the establishment of a whistleblower hotline). SOX section 806 provides protection for employees who blow the whistle against their employer, an anti-retaliation provision subsequently reinforced by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Programs to encourage external whistleblowing typically provide an incentive to the would be whistleblower, either in the form of monetary awards, protection from retaliation, or both.
Researchers have identified various issues that are most…...

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