Regulations And Standards Of The Sarbanes Oxley Act

The initial increases in costs for compliance with the Sarbanes-Oxley Act of 2002 have many ranges depending on the source and inputs. During 2005, based on a sample of the Fortune 1000 companies, there was an average increase in the audit fees of $2.3 million (Jahmani, Yousef; Dowling, William A., 2008). The public accounting firms suffered greatly as a result of the Sarbanes-Oxley Act of 2002 compliance stipulations. As of 2008, the estimate by the SEC was that compliance cost $2.3 million per year in direct costs related to compliance for public accounting firms

Sarbanes –Oxley Act, enacted by the United States congress is aimed at protecting investors. The protection is provided by improving the accuracy and reliability of corporate disclosures.

The GLB Safeguard Rule requires that financial institutions develop security programs to protect data; they also must provide provisions to protect customer’s information and it requires institutions to give customers a written privacy notices that explain how their information is shared.

The Sarbanes-Oxley is a U.S. federal law that has generated much controversy, and involved the response to the financial scandals of some large corporations such as Enron, Tyco International, WorldCom and Peregrine Systems. These scandals brought down the public confidence in auditing and accounting firms. The law is named after Senator Paul Sarbanes Democratic Party and GOP Congressman Michael G. Oxley. It was passed by large majorities in both Congress and the Senate and covers and sets new performance standards for boards of directors and managers of companies and accounting mechanisms of all publicly traded companies in America. It also introduces criminal liability for the board of directors and a requirement by

The Sarbanes Oxley Act is an act passed by the United States Congress to protect investors from the possibility of fraudulent accounting activities by corporation. The Sarbanes Oxley Act has strict reforms to improve financial disclosures from corporations and accounting fraud. The acts goals are designed to ensure that publicly traded corporations document what financial controls they are using and they are certified in doing so. The Sarbanes Oxley Act sets the highest level and most general requirements but it imposes the possibility of criminal penalties for corporate financial officers. The Sarbanes Oxley Act sets provisions that are used throughout numerous amounts of corporations. It holds companies to a larger responsibility and a higher standard with accounting principles and the accuracy of financial statements.

In 2008, when the financial crisis occurred, millions of Americans were left without jobs and trillions of dollars of wealth was lost wealth. To make sure the Great Recession would not happen again, President Barrack Obama put into effect the Dodd- Frank Act. With the help of this law, banks will not be able to take irresponsible risks that had negative effects on the American people. Furthermore, with the Volcker Rule embedded into the act, it will ensure that banks are no longer allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their

Prior to the advent of the Sarbanes-Oxley Act of 2002, referred to herein as “SOX,” the board of directors’ pivotal role was to advise senior leaders on the organization’s strategy, business model, and succession planning (Larcker, 2011, p. 3). Additionally, the board had the responsibility for risk management identification and risk mitigation oversight, determining executive benefits, and approval of significant acquisitions (Larcker, 2011, p. 3). Furthermore, for many public organizations, audit committees existed before SOX and provided oversight of internal processes and controls. Melissa Maleske (2012) advised that the roles and responsibilities of the board were viewed “…from a perspective that the board serves management” (p. 2). In contrast, Maleske (2012) noted that SOX regulations altered the landscape “…to a perspective that management is working for the board” (p. 2). SOX expanded not only the duties of the board and the audit committee, but also the authority of these bodies (Maleske, 2012, p. 2).

There used to be a time in the United States when there were no regulations in place to protect the public from corporate greed and deceit. Publically traded companies used the auditors they had on retainer to audit their financial statements. There was no reason to believe that such large corporations would allow their share holders to fall. That fairytale came to an end with the discovery of the Enron and WorldCom scandals. These nightmares made the public “wake up” and realize that nothing was required of these companies to prove their statements or protect their shareholders. Regulation was

The Sarbanes-Oxley Act was passes in 2002 in response to a handful of large corporate scandals that occurred between the years 2000 to 2002, resulting in the losses of billions of dollars by investors. Enron, Worldcom and Tyco are probably the most well known companies that were involved in these scandals, but there were a number of other companies guilty of such things as well. The Sarbanes-Oxley Act was passed as a way to crackdown on corporations by setting new and improved standards that all United States’ public companies and accounting firms were and are required to abide by. It also works to hold top level executives accountable for the company, and if fraudulent behaviors are discovered then the executives could find themselves in hot water. The punishments for such fraudulence could be as serious as 20 years jail time. (Sarbanes-Oxley Act, 2014). The primary motivation for the act was to prevent future scandals from happening, or at least, make it much more difficult for them to happen. The act was also passed largely to protect the people—the shareholders—from corporations, their executives, and their boards of directors. Critics tend to argue that the act is to complicated, and costs to much to abide by, leading to the United States losing its “competitive edge” in the global marketplace (Sarbanes-Oxley Act, 2014). The Sarbanes-Oxley act, like most things, has its pros and cons. It is costly; studies have shown that this act has cost companies millions of

Senator Paul Sarbanes and Representative Michael Oxley created the act to keep businesses from producing false financial documents just to get investors to invest into the company because it appears that the business is doing very well. Companies like Enron under this new act couldn’t produce the false accounting statements without first having an auditor coming in and checking over the inventories or book keeping data. Now investors can relax a little more and not worry that the financial statements are falsified or are generalized and rounded up to make the company look good. Investors can trust that the auditors are doing their job and verifying the books and data for those companies.

When it comes to bank regulations their used to help us with all our needs when it comes to the many steps to handling a bank business and our economic power storage house. The U.S., banking is regulated at both the federal and state level. Depending on the type of charter a banking organization has and on its organizational structure, it may be subject to numerous federal and state banking regulations Apart from the bank regulatory agencies the U.S. maintains separate securities, commodities, and insurance regulatory agencies at the federal and state level. I will discuss Part 1002 - Reg B - Equal Credit Opportunity Act (ECOA) Compliance.

The Sarbanes-Oxley Act (SOX) was enacted in July 30, 2002, by Congress to protect shareholders and the general public from fraudulent corporate practices and accounting errors and to maintain auditor independence.   In protecting the shareholders and the general public the SOX Act is intended to improve the transparency of the financial reporting.   Financial reports are to be certified by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) creating increased responsibility and independence with auditing by independent audit firms. In discussing the SOX Act, we will focus on how this act affects the CEOs; CFOs; outside independent audit firms; the advantages and a

The ethical breaches of numerous prominent corporations prompted Congress to pass legislation in response to accounting misconduct. The purpose of the Sarbanes Oxley Act of 2002 (SOX) was to protect investors by increasing the reliability of financial reporting and enhancing audit quality. One of the most influential and costly parts of the Act is Section 404. Section 404 requires companies to establish internal controls and test procedures that are designed to monitor and prevent manipulation of financial data (Brite, 2013). This requires all CEO’s and CFO’s to certify that they have reviewed all financial reports and there are no false and misleading information. The Public Accounting Company Oversight Board (PACOB) was established under the supervision of the Securities and Exchange Commission (SEC) to oversee and regulate auditing standards by enlisting external auditors to review the accuracy of financial statements and enforce laws.

Restrictions on the number of new financial services institutions allowed to enter the industry each year are needed to protect the integrity and stability of consumers’ cash and deposits, as well as outstanding loans and credit. Although many are private companies, financial institutions have a very public purpose, which is why federal regulations are needed. The safety and security of the financial institution is an important part of the overall financial system. Federal guidelines with capital structure requirements and market entry limits protect consumers from losing their money or assets to institutions who are not adequately funded to maintain business through times of financial downturn (Northeast Decision Sciences Institute, 2013). Barriers to entry in the United States financial services industry is needed and necessary to protect the American consumer and the American financial market from both foreign and domestic financial services companies. Regulating the entry of new financial services companies, whether foreign or domestic-based, also helps establish a level playing field for new and existing companies within the regulatory system (McDonough, 1993).

In November 2009 the Financial Services Bill was introduced into Parliament. The Bill builds on the action taken so far by the Government in response to the financial crisis, and delivers wide-reaching reforms to strengthen financial regulation, support better corporate governance and provide protection to consumers. The Bill calls for a new Council for Financial Stability which is intended to consist of Treasury, Bank of England and FSA officials. It also requires major banks to hold larger capital reserves and to prepare so-called "living wills".