Problem Solution: Carenetwest Corporation
...September 19, 2006
Abstract
In response to increased concern and awareness of corporate governance, conflicts of
interest and financial reporting, the Sarbanes-Oxley Act (SOX) was signed into law on July 30, 2002 by President Bush. The provisions of SOX affect the operation of public companies in several aspects, including corporate governance, financial disclosure, executive activities and responsibilities, and auditor independence. The most difficult part of Sarbanes-Oxley is Section 404, which is responsible for the greatest portion of compliance. Top executives are now held more accountable for the organization's compliance which means being aware of weaknesses and taking actions to mitigate those weaknesses. CareNetWest is a Medical Services corporation managing 80 hospitals in the western United States. Due to rapid growth and an emphasis on making the company bigger and increasing revenues, the organization has overlooked the diligent management of risk as pertaining to SOX and JCAHO. Tad the CEO and Chairman must undertake a crash course in preparing to meet these important regulatory requirements in a very short time-frame. With the help of his outside accounting firm, Tad is learning that his organization will need to make some major revisions in its structure to ensure compliance both in the short-term and in the long-term.
Problem Solution: CareNetWest Corporation
In today's post Enron business environment, it is imperative that upper management and boards of directors make informed and ethical decisions geared toward compliance with Sarbanes Oxley (SOX). Compliance is more than just how the information is reported, but the way the organization is structured to provide oversight and governance.
CareNetWest Companies, Inc. is currently in a crisis created by CEO, Tad Smith who chose to form a non-traditional management structure...
View Full Essay
