Itis very unfortunate that many companies continue with unethicalbehaviors of presenting incorrect financial statements so as to givetheir operations a positive outlook. If the alleged offenses arefound to be true, then Tesco’s management betrayed the trustbestowed upon them by the shareholders. It is also a crime. It ismost likely that most senior executives were involved in the allegedscandal since everybody’s output is required before the financialstatements are issued to the public. However, it is possible toprevent this mistake in future. The above can be accomplished byfiring all those who played a role in the fraud and vetting the newteam meant to replace them. Additionally, every member of the staffshould be vetted to assess his or her appropriateness to serve in anyposition. Although the work of an external auditor is not to detecterrors and fraud, he could have reasonably discovered any thisfinancial misstatement. If the audit was properly done, it could haveprevented the propagation of fraud and protect the interests of otherstakeholders.
TheSarbanes-Oxley (SOX) Act of 2002 has failed to achieve its purpose. Alaw which was supposed to restore ethics in the American corporategovernance is yet to yield fruits. The failure to convict theexecutives of HealthSouth may be as a result of some shortcomings inits provisions. Also, the prosecution might have presented a weakcase before the court. The effect of the collapse of the case may bean increase in unethical practices among business executives.Universities and other institutions should give the former CFO ofHealthSouth, Aaron Bean a chance to address their audience. Heunderstands how corporate scandals are perpetuated and theirrepercussions. Hence, he can give invaluable advice to his listenerson how to prevent such mistakes in future and improve financialreporting.