Sarbanes Oxley Act # 11 Titles

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.

The Sarbanes-Oxley Act was a law created in 2002 to ensure that the boards of public companies oversee their companies in a more competent and transparent way in order to protect investors. Section 302 refers to the obligations of the corporate officers who sign the financial reports. The officers are responsible for verifying that the report is accurate and represents a true picture of the company’s financial condition. Section 401 states that The Commision must evaluate the financial reports. Section 404 covers the company’s internal control structure and the requirements of the accounting firm in assessing internal controls and reporting procedures. Section 409 requires a company to disclose information on changes to financial conditions or

The PCAOB is charged with establishing and enforcing auditing, quality control, ethics and independence standards and rules for public company accountants. The SEC will not accept an audit report from an accounting firm that is not registered with the PCAOB. Thus, SEC reporting companies must engage the services of a registered public accounting firm. The PCAOB is funded by new fees imposed on publicly-traded companies based on their market capitalization – the fees range from as little as $100 for the very smallest companies to more than $1 million for a handful of the largest companies.[4]

The Sarbanes-Oxley Act has many provisions. A few of the major provisions include the creation of the Public Company Oversight Board (PCAOB), Section 201, 203, 204, 302, 404, 809, 902, and 906. The PCAOB was the first true oversight of the accounting industry. It oversees and creates regulations, and it will monitor and investigate audits and auditors of public companies. The PCAOB has the authority to sanction firms and individuals for violations of laws, regulations, and rules. Section 302 requires the CEO and CFO to certify that they reviewed the financial statements, and that they are presented fairly. Section 404 requires management to state whether internal control procedures are adequate and effective, and requires an auditor to attest to the accuracy of the statement. Section 902 states that “It is a crime for any person to corruptly alter, destroy, mutilate, or conceal any document with the intent to impair the object’s integrity or availability for use in an official

The Sarbanes-Oxley Act of 2002, which is also known as the Public Company Accounting and Investor Protection Act or the Corporate and Auditing Accountability and Responsibility Act and then more commonly called Sarbanes-Oxley, or SOX, is a United States federal law that set new or enhanced standards for all of the United States public company boards, management and public accounting firms.

The provisions of the act apply, not only, to U.S. companies that are required to file annual reports with the Securities and Exchange Commission (SEC), but also to foreign companies that are listed in the U.S. or obligated to report to the SEC periodically. Title I of the Sarbanes-Oxley Act stipulates that a new Public Company Accounting Oversight Board (PCAOB) will be appointed and overseen by the SEC. The PCAOB board consists of five full-time members who are

The Sarbanes-Oxley Act was signed into law on July 30, 2002, by President George W. Bush; it was a congressional regulatory response to the enormously damaging corporate scandals at WorldCom, the Arthur Anderson accounting group and most notoriously, Enron. Because of the damage done not only to the reputations of those corporations and to the American corporate community but also to the stockholders and people who lost life savings (people who lost 401-K investments in the scandal), Congress had to take action to try and avoid scandals like these in the future. Hence, the Sarbanes-Oxley Act was created and passed into law. Will it deter future criminal activity vis-à-vis corporate financial reporting? There is no guarantee that the Act will prevent future corruption, but this paper asserts that the Sarbanes-Oxley Act is a step in the right direction.

“Sarbanes-Oxley Act of 2002” mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession” (U.S. Securities and Exchange Comissions).

The Sarbanes-Oxley act also goes by ‘Public Company Accounting Reform and Investor Protection Act’ or also the

The Sarbanes-Oxley Act of 2002, also known as SOX, was enacted in response to several corporate and accounting scandals with the goal of restoring investor confidence in the financial statements of public companies. It is a U.S. federal law covering such issues as auditor independence, corporate governance, evaluation of internal controls and greater financial disclosure. SOX also set new or expanded requirements for the board of all public companies, management or public accounting firms in the U.S. It outlines the obligations of the board of directors for public companies, adds criminal penalties for certain transgressions and required the Securities and Exchange Commission to establish regulations to specify how corporations will conform

After major corporate and accounting scandals like those that affected Tyco, Worldcom and Enron the Federal government passed a law known as the Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act. This law was passed in hopes of thwarting illegal and misleading acts by financial reporters and putting a stop to the decline of public trust in accounting and reporting practices. Two important topics covered in Sarbanes-Oxley are auditor independence and the reporting and assessment of internal controls under section 404.

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

Section 404 of SOX pertains to management’s assessment of internal controls (Center for Audit Quality, 2009). It requires each annual report to contain an “internal control report”, which guarantees that the top management team effectively established and maintained an effective internal control structure and procedures for financial reporting. It should also contain an assessment (at the end of the fiscal year) stating that the structure and procedures were followed effectively. Moreover, it directs the SEC to make sure each issuer has adopted a code of ethics for its senior financial managers (responsible for the financial statements’ integrity and accuracy). It also required the SEC to emphasize prompt disclosure when there are any changes or alterations made to the issuer’s code of ethics (Form 8-K).

Reacting to a flood of accounting scandals and media outcry, the U.S. Congress passed the Sarbanes-Oxley Act (SOX) in July 2002. It is administered by the Securities and Exchange Commission (SEC). It sought to prevent future cases such as the one witnessed with Madoff Investment Securities, by improving the accuracy of public company financial statements. An important goal of SOX is to make these financials more meaningful (i.e., transparent) to their intended readers.

These changes were outlined in the Sarbanes Oxley Act of 2002 (SOX). SOX completely revolutionized financial reporting, requiring senior management of firms to sign off on each financial statement that the company issues. It also stipulated that wrongful doing can result in not only termination but also imprisonment. SOX amplified the requirement for companies, requiring firms to maintain proper levels of internal controls when it comes to operating activities. SOX also established the creation of the Public Company Accounting Oversight Board (PCAOB) which implemented stricter auditing standards for public accounting firms. Not only were accounting firms required to consider internal controls, but they were also required report any significant deficiency directly to the board of directors. SOX stressed the importance of internal controls, and within internal controls it established the need for segregation of duties. Since this time, there have been many additions to accounting policies regards segregations of duties, and many functions of the business process dedicated to it.