Fatima Villanueva's Reaction

To A Comparative Analysis of the SOX, the Proposed Philippine Corporate Reform Act (2004) and the SEC's Code of Corporate Governance

The study showed the differences between the Sarbanes-Oxley Act and Philippine law on corporate governance. It had greatly increased my horizon and is relevant for a business student like me. I learned a lot and figured out that Philippine law really needs a lot of improvements. The study said that the U.S. government passed the Sarbanes-Oxley Act seeking to promote greater responsibility, accountability and transparency of external auditors, while professional accountants in the Philippines have adopted a Code of Ethics and moved towards the adoption of international accounting standards.

One interesting topic in the paper which I think is relevant is that concerning criminal penalties for altering documents. We can see a significant difference in this aspect between the Sarbanes-Oxley Act and the Philippine law. The same is true with respect to the penalty for defrauding shareholders of publicly traded companies and corporate fraud accountability. Our country imposes smaller fines and shorter periods of imprisonment. They are so light that a violator might not mind doing the same criminal act again. With that example we can already see the disparity in our laws. Although we have adopted international accounting standards there are still a lot of room for improvement which if we tried to do something about, we can benefit a lot from.

I totally agree with the study that change in Phillipine law can be significant in strengthening the Philippine financial market in order to pave the way for new investment to spur ECONOMIC GROWTH. I don’t want to sound like an antagonist to our lawmakers but our country is really in great need of CHANGE! For me, lawmakers should come up with laws that should be relevant to the country and at the same time implement those laws well for the benefit of our countrymen. Yes, it will be costly. It may also become the root of many arguments. But we have to look at the positive side because it can also strengthen the financial market and bring more investors to our country. On the other hand, each individual SHOULD also COMPLY with the laws that the government will implement.

I would also suggest that we make our own laws and not just copy or adopt those of another country. Lawmakers should create laws that they think are appropriate for the country and that fit our culture and traditions. They also have to make sure that the laws that they enact will be complied with and are for the benefit of the country. Each company has social responsibility. As said in my Corporate Social Responsibility class, a company should do what is ethical. One perfect example is by declaring the right amount of tax to be paid and paying the right amount as well. Just by doing these small things we can become better persons and build a better country.