Financial Acumen Is More Important than You Think Discussion

Description

Part 1: Financial Acumen
Keeping abreast of the financial measures and metrics employed by a company allows employees to better understand its health and position at any given time. Using Campbellsville University library link or other libraries and the Internet:
1. Review at least three (2) articles on financial acuity. Summarize the articles.
2. Discuss the benefits of establishing solid financial acumen in a company? Discuss your personal experiences in a situation where financial acumen was either not supported as an organizational hallmark or, conversely, was built into the company’s culture.
Part 2: Sarbanes-Oxley (SOX)
Write a commentary on Sarbanes Oxley and the importance this act has for American businesses today. Your commentary should include the following:
A. Rationale for SOX
B. Provisions of SOX
C. Enforcement of SOX

Post_Manur:
Part 1
The meaning of the word Financial acuity is the ability to apply the principles of the finance in a broad manner such that the they make a sound decision resulting in overall profitability to the company (Hynes, 2006). There are various benefits of having a strong financial knowledge such as it will result in the right investment strategy for the company, negotiate with the lenders, suppliers, labour unions etc., ability to take decisions at a right time and so on (Hynes, 2006). The ability of the company to succeed and the managers to enable the success depends on if they have the required financial skills. Financial skills can include budgeting, forecasting, analysing various options/projects, deciding the right debt equity mix, tax impact, cost constraint, resources constraint etc. A solid Financial acuity is required so as to maximize the productivity of the company (Hynes, 2006). Based on my experience, I was working on a project related to the banking sector whereby there had been various issues in the financial statements of the bank as the staff in charge of maintaining records lacked the required expertise and technical enterprise (Pticar, n.d.). I then recommended on having at least a single person with Finance experience and knowledge in the team who can guide the preparation process. Hence accordingly the mistakes in the financials were rectified and the team was also trained on the finance area so as to avoid any such future issues in the same area (Pticar, n.d.). Hence, the financial acumen even based on my personal experience plays a very key role in the overall success of the organisation goals and objectives (Ranjan et al., 2020). Further, the forecasting of the long term and short term plans helps the company to undertake various decisions related to loans, sale, purchase, marketing, hiring, layoffs etc accordingly. Understanding the financial health of the company is important to take timely action (Ranjan et al., 2020). 
Part 2
Sarbanes Oxley Act of 2002 (SOX) was enacted on 30th July 2002 by Congress as a federal law, which was passed in response to the scams of Enron and WorldCom which had a very big blow on the United States economy, the act was passed with the purpose to restore the public confidence, transparency of corporate governance, improve the internal control policies and procedures and build up the role of independent directors (Abdullah & Al-Jafari, 2011).
Sarbanes Oxley Act of 2002 (SOX) created the Public Company Accounting Oversight board (PCAOB) for monitoring and overseeing the Registered issuer companies in United States (Abdullah & Al-Jafari, 2011). The Sarbanes Oxley Act of 2002 (SOX) Act requires that the accountant not to provide any other non-audit services to the issuer company, further the accountants are required to maintain their working papers for a period of 7 years (Abdullah & Al-Jafari, 2011). The lead partner and concurring partner shall rotate once in every 5 years, further the management that is Chief Executive Officer and Chief Financial Officer shall attest about the working internal controls in the company, this shall be the part of the annual financial statements (Abdullah & Al-Jafari, 2011).
Sarbanes Oxley Act has intensified the penalties to be imposed on the officers there is even 25 years imprisonment along with strict penalties, the SOX act may even remove the directors and officers and prohibit them from serving if they are deemed unfit.

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